Kill the Death Tax

[cpwill]

There are two questions about resurrecting the 'death tax': the economic question and the moral question...

The economic question is simple: Does the estate tax help create jobs, grow the economy or improve our country. In every case, the answer is no.

First of all, it is unfair to retax money that has already been taxed, at least once, as income, capital gains or dividends. Washington already got its cut when the money was earned or invested. Congress has no outstanding claim on what is left over...

Nor does it help the economy.

Let's say an entrepreneur's business is worth $15 million. Under the proposed estate tax in the bipartisan deal, the day he dies, the businessman's kids would owe Uncle Sam $3.5 million. If they don't have that kind of cash lying around — and no small businessmen do — they have to sell the family business to pay the taxes. The company that buys the business sells off its assets and lets the employees go. A successful business disappears, and experienced employers no longer create jobs. In fact, hundreds of people lose their jobs. All so Congress can increase revenue by a thousandth of a percent?...

The economic argument holds up even if the heir to a vast fortune is a total embarrassment. Even if he never gets a real job and wastes his life away buying sports cars, comic books and expensive booze, the money he pumps into his local economy — via the car dealerships, book shops and liquor stores — will create more jobs than anything Congress would do with it.

Which brings us to the moral argument, which is what this is really all about. Does the money you earn over the course of your life belong to you, or does it really belong to the government, which generously allows you to keep some of it for a while?

 

[Manc Skipper]

Those kids should be individualistic and make their own fortunes, not sucking leech like on their dead daddy.

 

[WeAreReborn]

Well if the government spending is the same as today, I say we should not have it. The spending is going into all the wrong places. However, if the government provides great and useful services that doesn't including invading multiple countries while maintaining bases in over 100 countries then I would be ok with it.

 

[Diogenes]

Those kids should be individualistic and make their own fortunes, not sucking leech like on their dead daddy.

Are you suggesting that Bill Gates, Steve Jobs, Mark Zuckerberg, Michael Dell and Warren Buffett are all blood sucking leeches? Actually, they are being rewarded for their contributions to society; the real blood sucking leeches are people like Bill Ayers, Jeremiah Wright, Charlie Rangel, and John Kerry who have mastered the art of conning suckers into supporting them in a style they could never hope to actually earn.

The death tax is a tax on thrift, and it is both immoral and counter-productive.

 

[Albert Di Salvo]

Those kids should be individualistic and make their own fortunes, not sucking leech like on their dead daddy.

Same thing applies to poor people. Let them pull themselves up by their own bootstraps. Eliminate entitlements to the poor. They can make their own way in the world following your logic.

 

[Hoplite]

I think we need to have a system that discourages extreme hereditary wealth. That's one of the cornerstones of an aristocracy, especially one we have today.

 

[Barbbtx]

Do ya'll keep hearing how many billions, (they give some kind of exact number) of dollars we will lose on the estate tax cuts (from 55%-35%)

I am so confused! How can they say how much? Do they know how much money people will have that's taxable when they die? Do they know the people who will die, while this tax is in effect?
Is this the same accounting method they use to figure jobs saved?

Besides, they aren't the one's LOSING it. The losers are the heirs.

 

[Hoplite]

Do ya'll keep hearing how many billions, (they give some kind of exact number) of dollars we will lose on the estate tax cuts (from 55%-35%)

I am so confused! How can they say how much? Do they know how much money people will have that's taxable when they die? Do they know the people who will die, while this tax is in effect?
Is this the same accounting method they use to figure jobs saved?

AFAIK, it's calculated based on previous years. Since the death rate in a first world country tends not to flux too much, it's a fairly reliable way to calculate future gains.

 

[Henrin]

I think we need to have a system that discourages extreme hereditary wealth. That's one of the cornerstones of an aristocracy, especially one we have today.

Yeah its better to just give that money to the government. Don't want rich peoples wishes to be carried out. Nope....

sigh..

 

[cpwill]

I think we need to have a system that discourages extreme hereditary wealth. That's one of the cornerstones of an aristocracy, especially one we have today.

i don't think it's your dang money, so i don't think you should get a say. your attitude here is a conerstone of jacobism, especially the kind we have today.


my wife's uncle is a true American Story; pulled himself up from poverty by his bootstraps built a small business through hard work and taking good care of his employees etc; now his business is 'worth' several million dollars, but most of those millions aren't in cash; they are in the form of machinery and the property that the plant is on. if (God forbid) he and his wife are killed in a car accident tomorrow, then on top of losing their parents, the government is going to come shake down his two girls, force them to close the business, fire all the workers (good luck to them getting new jobs; this is construction industry), sell the machinery plant and property for below-worth prices in order to pay a tax bill?

it's unconsionable.

 

[Barbbtx]

i don't think it's your dang money, so i don't think you should get a say. your attitude here is a conerstone of jacobism, especially the kind we have today.


my wife's uncle is a true American Story; pulled himself up from poverty by his bootstraps built a small business through hard work and taking good care of his employees etc; now his business is 'worth' several million dollars, but most of those millions aren't in cash; they are in the form of machinery and the property that the plant is on. if (God forbid) he and his wife are killed in a car accident tomorrow, then on top of losing their parents, the government is going to come shake down his two girls, force them to close the business, fire all the workers (good luck to them getting new jobs; this is construction industry), sell the machinery plant and property for below-worth prices in order to pay a tax bill?

it's unconsionable.

bu...but..but..It's not fair.They don't need that much. Rich people are greedy.

 

[TurtleDude]

Those kids should be individualistic and make their own fortunes, not sucking leech like on their dead daddy.

that is funny coming from a liberal who thinks that the government should take the wealth so lazy parasites can suck on the public teat

 

[cpwill]

bu...but..but..It's not fair.They don't need that much. Rich people are greedy.

and their kids should have to work to get it! you shouldn't be allowed to improve your situation off of the work of your forefathers!



which is why I, and all my fellow pro-estate-taxers are going back into the woods to live off of animals and what we can grub from the soil! no rich kid moochin-off-of-the-industrial-period for us!!!

 

[MaggieD]

There are two questions about resurrecting the 'death tax': the economic question and the moral question...

The economic question is simple: Does the estate tax help create jobs, grow the economy or improve our country. In every case, the answer is no.

First of all, it is unfair to retax money that has already been taxed, at least once, as income, capital gains or dividends. Washington already got its cut when the money was earned or invested. Congress has no outstanding claim on what is left over...

Nor does it help the economy.

Let's say an entrepreneur's business is worth $15 million. Under the proposed estate tax in the bipartisan deal, the day he dies, the businessman's kids would owe Uncle Sam $3.5 million. If they don't have that kind of cash lying around — and no small businessmen do — they have to sell the family business to pay the taxes. The company that buys the business sells off its assets and lets the employees go. A successful business disappears, and experienced employers no longer create jobs. In fact, hundreds of people lose their jobs. All so Congress can increase revenue by a thousandth of a percent?...

The economic argument holds up even if the heir to a vast fortune is a total embarrassment. Even if he never gets a real job and wastes his life away buying sports cars, comic books and expensive booze, the money he pumps into his local economy — via the car dealerships, book shops and liquor stores — will create more jobs than anything Congress would do with it.

Which brings us to the moral argument, which is what this is really all about. Does the money you earn over the course of your life belong to you, or does it really belong to the government, which generously allows you to keep some of it for a while?

Well, the ugly truth about not having death tax and nottaxing the first $3 million is that the decedent's estate avoids paying capital gains taxes, as an example. And that can be huge.

Uncle Harry bought 1,000 shares of Microsoft back in 1980 for $20.00/share and died this year. (I'm making this numbers up, but you get the picture.) He now owns, thru stock splits, 50,000 shares of Microsoft worth $28/share. So, at his death, his $20,000 stock purchase had appreciated to $1.4 million. His heirs inherit the stock at the stepped up value of $1.4 million. So dead Uncle Harry avoided paying capital gains on $1.38 million. And his heirs inherit the stock at its current value. Uncle Harry pays no estate tax at all (this year), his heirs turn around and sell the stock for $1.4 million, and owe nothing in capital gains.

That's the untold dirty secret about estate taxes. So when people say it's double taxation? That's certainly not always true...

 

[TurtleDude]

so what? the people who are subject to the death tax have already paid far far more taxes than those who are never subjected to it. and for all the estates under the limit that would be true as well even with the death tax

 

[MaggieD]

so what? the people who are subject to the death tax have already paid far far more taxes than those who are never subjected to it. and for all the estates under the limit that would be true as well even with the death tax

Turtle, I'm not judging it. I'm not commenting on whether or not there should be an estate tax. You prolly remember where I stand on it. But to say that it represents double taxation is, without doubt, most often not true. The example I gave was under the limit. Actually, I think it's more than fair to change the way those gains are handled. Don't you?

 

[cpwill]

Well, the ugly truth about not having death tax and nottaxing the first $3 million is that the decedent's estate avoids paying capital gains taxes, as an example. And that can be huge.

capital gains taxes are double taxed already.

 

[Ikari]

capital gains taxes are double taxed already.

Capital gain taxes are a joke. Income is income, it should all be taxed the same.

 

[MaggieD]

capital gains taxes are double taxed already.

How so, CP. Certainly not in my tax return.

 

[cpwill]

How so, CP. Certainly not in my tax return.

corporate taxes are paid on that profit before it is given out to shareholders.

 

[MaggieD]

corporate taxes are paid on that profit before it is given out to shareholders.

Ah, I see your point. I wish the IRS agreed with you. Honest!

 

[drz-400]

How so, CP. Certainly not in my tax return.

It is because corporate income (profit) for the company is taxed by the corporate income tax. Then when the corporation pays dividends to its individual stockholders this is once again taxed because it is income for each individual.

Oops, someone already said that!

 

[TurtleDude]

Turtle, I'm not judging it. I'm not commenting on whether or not there should be an estate tax. You prolly remember where I stand on it. But to say that it represents double taxation is, without doubt, most often not true. The example I gave was under the limit. Actually, I think it's more than fair to change the way those gains are handled. Don't you?

actually in many cases its double taxation. say my father bought some real estate with taxed money. THe real estate was worth 2 million when he bought it and with the down turn in the housing market its 2 million when he dies. its not producing any income since it was the home he and my mother lived in. They die-and when the limit was a million tell me the tax ramifications.

 

[TurtleDude]

Ah, I see your point. I wish the IRS agreed with you. Honest!

this is why we need to get rid of the IRS and the income tax

 

[drz-400]

corporate taxes are paid on that profit before it is given out to shareholders.

The problem is though, to know who really pays we have to consider the incidence of the corporate tax. Do the workers, shareholders, or the customers have the burden of the corporate tax?