Should there be an inheritance tax?

[LaMidRighter]

And I get frustrated with the idea that the Republicans are no more to blame for our huge national debt than the Democrats.

The US debt in 1980 was $1 trillion, 1.8x greater than revenues. By the time Clinton came into office 12 years later, the debt was at 4 trillion, 3.7x reveneues. When Clinton left office, the debt was at 5.7 trillion, 2.8X revenues. Now the debt is at 7.9 trillion, and it is 3.9x revenues.

You can get the numbers from the Congressional Budget Office; CBO.gov, and the Department of the Treasury (http://www2.publicdebt.treas.gov/opd/opd.htm). Or I can post them.

Of the $7.8 trillion US debt, $1 trillion existed before Reagan came into office, $1.7 trillion growth occurred during the Clinton administration and the balance, 5.1 trillion, is thanks to our Republican leaders. From 1980-2005, Republicans were in the WH 68% of the time, and account for 75% of the growth in debt during that period.

While it is true that some of the debt growth (1.7 trillion) occurred during the Clinton administration, he inherited a $340 billion deficit budget. The debt has grown by 2.2 trillion under Bush II (so far); and he inherited a budget that was in surplus.

Numbers don't spin. It is completely fair to call it the "Republican debt." That is the the Reagan-Bush legacy -- the "pass the buck" generation.

Like I said, House/Senate makes the budget, the President simply signs it, Republicans got a strong majority in '94, lost some of it and just regained it. So yes, it is unfair to call it anything but a Democrat debt.

The person who pays me for services has already paid taxes on the money he pays me. So why isn't it wrong, period, why I pay double taxation?

Step back for a second and think about what you're advocating, you are basically supporting the governments right to tax every aspect of human existence, including death, Inheritance taxes are improper, and if they are needed so badly as you advocate, then why not scale back social programs to simple basic need, only cases that are provable and necessary, or better yet, let the private sector take care of that, but leave tax paying citizens alone because lord knows taxpayers get screwed enough, why give them one last slap in the face by taking a huge percentage of what they want to leave to their own. And on that subject, who would you rather leave your estate to? honestly. Would you rather leave it to your wife and kids or the family you never met? Honest answer only please.

 

[Iriemon]

Like I said, House/Senate makes the budget, the President simply signs it, Republicans got a strong majority in '94, lost some of it and just regained it. So yes, it is unfair to call it anything but a Democrat debt.

The President plays a major role in the budget and has veto power. The tax cuts in '81 were not because the Dems controlled Congress. Taxes were not cut in the late 90s because Clinton was pres. In any case, Repubs controlled both branches since 2000, presiding over a surpluse budget to $600 billion annual deficits and $2.2 trillion in more debt. So blame that on the Dems too.

Step back for a second and think about what you're advocating, you are basically supporting the governments right to tax every aspect of human existence, including death, Inheritance taxes are improper, and if they are needed so badly as you advocate, then why not scale back social programs to simple basic need, only cases that are provable and necessary, or better yet, let the private sector take care of that, but leave tax paying citizens alone because lord knows taxpayers get screwed enough, why give them one last slap in the face by taking a huge percentage of what they want to leave to their own. And on that subject, who would you rather leave your estate to? honestly. Would you rather leave it to your wife and kids or the family you never met? Honest answer only please

You are talking apples and oranges. It doesn't matter what the government spends or not on the question of whether heirs should get a tax free ride. If the govt spends less, then we all can pay less taxes; but it still doesn't make sense IMO that someone who inherits pays NO tax and someone who works pays MORE tax.

To answer the latter part of your question, on a personal level: Honestly, I don't like to pay taxes at all, and so to answer your question I would never "rather" money I earn go to the government instead of keeping it. However, I recognize we have a government, it spends money and therefore taxes are a necessity. I cannot rationally justify an argument that my daughters ought to inherit money I will leave them tax free, and in exchange some guy working hard to make a living has to pay MORE taxes so my daughters can get a free ride. My daughters will have enough of an advantage by inheriting money I leave them, they do not need tax exempt status that someone else will have to pay MORE taxes to cover.

The guy who works should have to pay MORE taxes so the wealthiest get a free ride. That puts everything backward about a system that rewards hard work and merit, not to mention basic fairness.

 

[LaMidRighter]

The President plays a major role in the budget and has veto power. The tax cuts in '81 were not because the Dems controlled Congress. Taxes were not cut in the late 90s because Clinton was pres. In any case, Repubs controlled both branches since 2000, presiding over a surpluse budget to $600 billion annual deficits and $2.2 trillion in more debt. So blame that on the Dems too.

I think we have some middleground on this because it seems we can agree that both sides have made some serious economic mistakes here.

You are talking apples and oranges. It doesn't matter what the government spends or not on the question of whether heirs should get a tax free ride. If the govt spends less, then we all can pay less taxes; but it still doesn't make sense IMO that someone who inherits pays NO tax and someone who works pays MORE tax.

Here we will have a disagreement, it most certainly does matter what the government spends money on because they don't own a dime, it is our tax money collected to go to projects that benefit all americans of all classes, such as defense, interstates, utilities, and the like. With this in mind, inheritance is NOT the governments money, it is money that the earner already paid taxes on and therefore is essentially theirs after tax to do so as they wish, if it's enough to give their kids the family farm/business(which is taxable) or give their kids the investment dollars to strike out on their own which may otherwise be unavailable, or even to **** away on the French Riviera then it is no-one else's business than those inheriting it, also, it most certainly isn't a "free ride" someone earned that money and paid their dues and taxes on it, therefore, the government is completely wrong to attack said beneficiaries. On a side note, some inheritance is taxed so harshly that the beneficiaries are actually worse off after recieving this gift.

To answer the latter part of your question, on a personal level: Honestly, I don't like to pay taxes at all, and so to answer your question I would never "rather" money I earn go to the government instead of keeping it. However, I recognize we have a government, it spends money and therefore taxes are a necessity.

I don't have any personal problems with paying fair taxes, but the way things are going right now, taxes most certainly are not fair, and the biggest problem is that many who don't suffer from overtaxation are the same ones demanding more taxes for other classes and more stuff, it is greedy, ungrateful and dangerous, this leads to budget problems and is in my opinion, un-american.

I cannot rationally justify an argument that my daughters ought to inherit money I will leave them tax free, and in exchange some guy working hard to make a living has to pay MORE taxes so my daughters can get a free ride.

Why do you care about the other guy, that's his business, and honestly, if he is in a lower tax bracket, then he is probably paying less than 5% of the taxes the highest bracket is paying.

My daughters will have enough of an advantage by inheriting money I leave them, they do not need tax exempt status that someone else will have to pay MORE taxes to cover.

Not necessarily, see the above statements.

The guy who works should have to pay MORE taxes so the wealthiest get a free ride. That puts everything backward about a system that rewards hard work and merit, not to mention basic fairness.

Basic fairness is you get what's due you, if your gross income is diminished by over 35+% a year and the other guy pays nothing regardless of "ability to pay" it is by it's very nature unfair, what you left out of this whole argument is, the person making the most money is actually being punished for their intitiative to work longer hours or take a job he hates to get ahead, his "reward" for investing time and money in bettering himself is to pay a disproportionate amount of taxes in comparison to the guy who maybe dropped out of high school, or took a dummy degree plan, or played it safe and never took a risk. Then after all of this "reward" for his hard work, the same government backed by the same people demanding portions of his paycheck also lay claim to what he leaves to his family after that. So I ask again. Is that fair?

 

[Iriemon]

Here we will have a disagreement, it most certainly does matter what the government spends money on because they don't own a dime, it is our tax money collected to go to projects that benefit all americans of all classes, such as defense, interstates, utilities, and the like.

Oh, I agree it matters what the Govt spends its money on. I meant in terms of who the question of who has to pay the tax, it doesn't matter. If the Govt spends money, there must be a tax. The issue is, who should (or should not) have to pay tax.

With this in mind, inheritance is NOT the governments money,

Is the money I earn the government's money?

it is money that the earner already paid taxes on and therefore is essentially theirs after tax to do so as they wish, if it's enough to give their kids the family farm/business(which is taxable) or give their kids the investment dollars to strike out on their own which may otherwise be unavailable, or even to **** away on the French Riviera then it is no-one else's business than those inheriting it,

OK. Your argument is the earner already paid the tax. So he should be able to do with it as he wishes without it being taxed again, because that would be double taxation.

So why do I have to pay taxes if the earner wants to give me some money in exchange for services?

also, it most certainly isn't a "free ride" someone earned that money and paid their dues and taxes on it,

To the people that are given the inheritance, it is a free ride, they didn't earn the money and they haven't paid their dues and they haven't paid their taxes on it.

therefore, the government is completely wrong to attack said beneficiaries.

But it is completely OK for the govt to attack said people who work for their income.

On a side note, some inheritance is taxed so harshly that the beneficiaries are actually worse off after recieving this gift.

I can't say I have ever heard of someone turning down and inheritance because of the tax.

I don't have any personal problems with paying fair taxes, but the way things are going right now, taxes most certainly are not fair, and the biggest problem is that many who don't suffer from overtaxation are the same ones demanding more taxes for other classes and more stuff, it is greedy, ungrateful and dangerous, this leads to budget problems and is in my opinion, un-american.

Different issue.

Why do you care about the other guy, that's his business, and honestly, if he is in a lower tax bracket, then he is probably paying less than 5% of the taxes the highest bracket is paying. Not necessarily, see the above statements.

I care about the other guy if he gets a special tax exempt status because I have to pay MORE taxes so he can inherit money tax free. It's not enough that he was lucky enough to be born to a wealthy family, good for him, but then my Govt bends me over and screws me so that he doesn't have to pay any tax. That's why I care.

Basic fairness is you get what's due you, if your gross income is diminished by over 35+% a year and the other guy pays nothing regardless of "ability to pay" it is by it's very nature unfair,

Well, that is what I am saying.

what you left out of this whole argument is, the person making the most money is actually being punished for their intitiative to work longer hours or take a job he hates to get ahead, his "reward" for investing time and money in bettering himself is to pay a disproportionate amount of taxes in comparison to the guy who maybe dropped out of high school, or took a dummy degree plan, or played it safe and never took a risk;

or was born to a wealthy family and inherits ten million bucks.

Exactly.

Then after all of this "reward" for his hard work, the same government backed by the same people demanding portions of his paycheck also lay claim to what he leaves to his family after that. So I ask again. Is that fair?

The guy who earned the money isn't being taxed again. He's dead. His heirs are effectively being taxed.

It is completely fair that an heir, who receives inheritance income, pay the same level of tax as someone who works for it. Arguably more; but I think everyone should pay the same tax on their income, whatever the source.

It is completely unfair that an heir, who did nothing to earn the income, pays NO tax and as a result, people who work for a living have to pay MORE tax.

Anyone who believes in a system where hard work and talent should be rewarded should agree with this basic proposition. Educating yourself, hard work, talent and skill should be rewarded. If anything, those folks should get the tax break and the folks who inherit a bunch of money they didn't earn should have to pay more tax. How can you be arguing for for a system to reward people who didn't earn money they are receiving? It makes no sense to me at all.

Unless your goal is to keep wealth in the richest families, and let those who have to work for a living pay the tax burden. That smacks of feudalism to me.

 

[BWG]

You guys are talking about taxing inheritance money twice. How about the gift tax?

Being very basic, no loopholes, etc. While you are alive if you want to give your kids (or anybody) money or property worth more than $11,000, you are responsible for the gift tax. Hasn't the money you are giving away already been taxed once? Of course there are exceptions.


The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

1. Gifts that are not more than the annual exclusion for the calendar year(The annual exclusion for gifts made in 2004 and 2005 will remain at $11,000.)
2. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
3. Gifts to your spouse.
4. Gifts to a political organization for its use.

Now I wonder who wrote the code to include #4?

 

[LaMidRighter]

Oh, I agree it matters what the Govt spends its money on. I meant in terms of who the question of who has to pay the tax, it doesn't matter. If the Govt spends money, there must be a tax. The issue is, who should (or should not) have to pay tax.

So the common ground issue here could be that government should make do with what it has and scale back in necessary and less essential areas thus ending the need for harsh penalties on the tax base, and could then institute a national sales tax which would be more fair.in my opinion.

Is the money I earn the government's money?

No, which is the point I want to make, it is not the government's money and on principle I must stand behind the position of ending the inheritance tax and hopefully the income tax.

OK. Your argument is the earner already paid the tax. So he should be able to do with it as he wishes without it being taxed again, because that would be double taxation.

yep, and if that person wants to give it to his beneficiaries in full taxing that money again is not allowing him to do that

So why do I have to pay taxes if the earner wants to give me some money in exchange for services?

Different situation, services are in the same category as goods which means they are subject to tax upon usage, and inheritance tax is basically punitive towards an already agreed upon endowment.

To the people that are given the inheritance, it is a free ride, they didn't earn the money and they haven't paid their dues and they haven't paid their taxes on it.

In some instances maybe, but what about the children who worked the family business for years, they paid their own income taxes and then to obtain said business they must pay taxes to inherit it at appraised value, then there is the actual inheritance from the parents upon passing. We can't really qualify whether or not they earned their way so why not air on the side of reasonable doubt.

But it is completely OK for the govt to attack said people who work for their income.

I have never said that one. If you read my responses on other threads you'll see I hate the progressive income tax and am in favor of either a tiered flat tax or a national sales tax.

I can't say I have ever heard of someone turning down and inheritance because of the tax.

And I wouldn't either, even if upon my parents passing all I got was sentimental stuff I'd still take it in their memory, it's a last gift to show what those in your life mean to you.



I

care about the other guy if he gets a special tax exempt status because I have to pay MORE taxes so he can inherit money tax free. It's not enough that he was lucky enough to be born to a wealthy family, good for him, but then my Govt bends me over and screws me so that he doesn't have to pay any tax. That's why I care.

I don't see it that way at all, not all people who inherit money are wealthy or have alot coming to them but let's say that said inheritance would be just enough to finish paying off a house pre-tax, now our "beloved" representatives take their "fair" share and that house now does not get paid in full, to play devil's advocate, what if I, as the benefactor wanted exactly that, for my children to be debt free earlier than I was and actually enjoy the rest of their lives, that has essentially been taken away from me and my children because of a tax on income that I have paid for over the years already.

It is completely fair that an heir, who receives inheritance income, pay the same level of tax as someone who works for it. Arguably more; but I think everyone should pay the same tax on their income, whatever the source.

I disagree.

Anyone who believes in a system where hard work and talent should be rewarded should agree with this basic proposition. Educating yourself, hard work, talent and skill should be rewarded. If anything, those folks should get the tax break and the folks who inherit a bunch of money they didn't earn should have to pay more tax.

Both sides should get a tax break, in fact until americans start to agree on both of these sides, the IRS wins.

How can you be arguing for for a system to reward people who didn't earn money they are receiving? It makes no sense to me at all.

I am arguing for an end to unfair taxation on both ends, I don't care if an inheritor didn't earn the money, someone did, just like I don't care if the wealthy get huge tax returns because I want to be there someday and realize that they already pay too much in taxes, I am against class warfare and to me taxes are the epiome of it.

Unless your goal is to keep wealth in the richest families, and let those who have to work for a living pay the tax burden. That smacks of feudalism to me.

I think I made a clear enough point about where I stand, maybe we'll just have to agree to disagree.

 

[Iriemon]

No, which is the point I want to make, it is not the government's money and on principle I must stand behind the position of ending the inheritance tax and hopefully the income tax.

If your opposition to the inheritance tax is based on an opposition to income taxes in general, fair enough. We can discuss alternate taxation theories on appropriate threads.

Iriemon: So why do I have to pay taxes if the earner wants to give me some money in exchange for services?

Different situation, services are in the same category as goods which means they are subject to tax upon usage, and inheritance tax is basically punitive towards an already agreed upon endowment.

Why? Why should income based on providing services or selling goods, something that gives value, but subject to tax, while an inheritance, which is basically a gift, is not?

An inheritance tax is no more "punitive" than the income tax, is it?

I don't understand what you mean by "an already agreed upon endowment." Why should that transaction be tax free, while "an already agreed upon" payment for my services, is taxed? Both cases involved double taxation, as the person making the payment has already paid taxes.

So the common ground issue here could be that government should make do with what it has and scale back in necessary and less essential areas thus ending the need for harsh penalties on the tax base, and could then institute a national sales tax which would be more fair.in my opinion.

We can discuss that in the "fair tax" thread.

In some instances maybe, but what about the children who worked the family business for years, they paid their own income taxes and then to obtain said business they must pay taxes to inherit it at appraised value, then there is the actual inheritance from the parents upon passing. We can't really qualify whether or not they earned their way so why not air on the side of reasonable doubt.

If the children worked in the business, they should be paid a salary and pay income tax like everyone else. They can be compensated in stock, like any other employee, and pay taxes on that too.

Should Sam Walton's heir be able to collect a fat salary from Wal-mart tax free?

I don't see it that way at all, not all people who inherit money are wealthy or have alot coming to them but let's say that said inheritance would be just enough to finish paying off a house pre-tax, now our "beloved" representatives take their "fair" share and that house now does not get paid in full, to play devil's advocate, what if I, as the benefactor wanted exactly that, for my children to be debt free earlier than I was and actually enjoy the rest of their lives, that has essentially been taken away from me and my children because of a tax on income that I have paid for over the years already.

Same question. Why should an heir get a tax break for this as opposed to someone who works? They are in the same situation. What if I want to pay my house off in full, and I want exactly that, but I can't do it because our "beloved" representatives take their "fair" share of my income, so now I can't pay off my house. Why shouldn't I be entitled to tax free status for the same reason. Why is it more fair for the heirs to get a tax break so they can get a paid in full house, while it takes me longer to pay for my house because I have to pay MORE taxes so the heirs don't? Why is that fair?

I think I made a clear enough point about where I stand, maybe we'll just have to agree to disagree.

Your stand is clear -- people who work should pay higher taxes so people who inherit are tax free.

Let me ask a different question: If someone should be able to inherit can do so tax free, why not someone who receives a gift? Why should it matter whether the giver is dead? If I want to give a gift to my children, should they be able to receive it tax free? Why should I have to wait until I'm dead, when I cannot reap the benefit?

If I can give a gift to my children tax free, why can't I give a gift to my doctor tax free?

 

[LaMidRighter]

Why? Why should income based on providing services or selling goods, something that gives value, but subject to tax, while an inheritance, which is basically a gift, is not?

As long as there exists an income tax the unfortunate reality is that every service is someone's income and therefore is subject to taxation.

An inheritance tax is no more "punitive" than the income tax, is it?

They are both punitive and I disagree with both of them, however this is an inheritance tax thread which is why I try to stick to my opinion on that particular issue.

I don't understand what you mean by "an already agreed upon endowment." Why should that transaction be tax free, while "an already agreed upon" payment for my services, is taxed? Both cases involved double taxation, as the person making the payment has already paid taxes.

An already agreed upon endowment in this case meaning a will and the inheritance left by that contract. The thing about the transaction of said inheritance that should make it tax exempt is the fact that the lawyer's sevices have already been paid for, the execution of said contract is already paid in full, therefore the transaction should be a settled matter at face value.

If the children worked in the business, they should be paid a salary and pay income tax like everyone else. They can be compensated in stock, like any other employee, and pay taxes on that too.

Here's the problem, the children's pay is already taxed, then they are taxed again for recieving the business and it's assets, and if the stock options are in fact taken then that is taxable as well, also, why should, for instance I should be compelled to treat my own kids "like any other employee" if they are competant enough to fill a leadership position and the second problem with stocks is that not all inheritable businesses are publicly traded meaning the kids may take sole responsibility for the business upon the benefactor's death.

Should Sam Walton's heir be able to collect a fat salary from Wal-mart tax free?

I don't see why not, especially considering he is on the board of directors and also paying income tax.

Same question. Why should an heir get a tax break for this as opposed to someone who works? They are in the same situation. What if I want to pay my house off in full, and I want exactly that, but I can't do it because our "beloved" representatives take their "fair" share of my income, so now I can't pay off my house. Why shouldn't I be entitled to tax free status for the same reason. Why is it more fair for the heirs to get a tax break so they can get a paid in full house, while it takes me longer to pay for my house because I have to pay MORE taxes so the heirs don't? Why is that fair?

Firstly, I'll say this, life ain't fair unfortunately, but outside of that fact the other thing is that you seem to be leaving out the fact that you ARE paying taxes on your current income while these benefactors HAVE ALREADY PAID income taxes on these endowments.

Let me ask a different question: If someone should be able to inherit can do so tax free, why not someone who receives a gift? Why should it matter whether the giver is dead? If I want to give a gift to my children, should they be able to receive it tax free? Why should I have to wait until I'm dead, when I cannot reap the benefit?

Let's not change the subject, but I am against the gift tax as well for the exact same reasons.

If I can give a gift to my children tax free, why can't I give a gift to my doctor tax free?

The way I see it, if you like your doctor and the job he's done that much, if it were my call I'd say be my guest.

 

[Iriemon]

Firstly, I'll say this, life ain't fair unfortunately, but outside of that fact the other thing is that you seem to be leaving out the fact that you ARE paying taxes on your current income while these benefactors HAVE ALREADY PAID income taxes on these endowments.

How have heirs already paid income taxes on what they inherit? The taxes were paid by the deceased. The heirs (the benefactors) have not paid taxes on their inheritance income.

If you are talking about a situation wherer the heirs were paid a salary for working in a family business, then yes, they have paid taxes on that income, obviously I am not suggesting they should have to pay another tax on that income. However, they have not paid taxes on what they inherit.

The rest of your argument seems to be that your are against any income tax in general and favor replacing it with a sales tax. Fair enough, but that is another issue, and does not address the point that given we have a tax system based on income, why should inheritance income be treated differently.

 

[LaMidRighter]

How have heirs already paid income taxes on what they inherit? The taxes were paid by the deceased. The heirs (the benefactors) have not paid taxes on their inheritance income.

The benefactors are the deceased, the beneficiaries are the ones who are inheriting the money. Just wanted to adress that, but, the point remains that the deceased already paid the taxes, whether or not it seems fair to a person currently paying income taxes the government is essentially designating that it deserves a second helping of the deceased persons money after it has already been taxed because they decide to leave an estate.

If you are talking about a situation wherer the heirs were paid a salary for working in a family business, then yes, they have paid taxes on that income, obviously I am not suggesting they should have to pay another tax on that income. However, they have not paid taxes on what they inherit.

Look at it this way, they took taxes from the benefactor's income, the beneficiaries income, then they have the gall to take away form the estate after all of that, essentially, you are screwing both parties twice. Please forgive a quick analogy, if you buy something at the store at a generous price and then the store owner came back and said "oh, yeah, I added a second charge for taking the stuff out of the store" you'd be a little miffed right, well, essentially the government is adding a second charge for people having the nerve to die and leave their children a little better off.

why should inheritance income be treated differently.

Because I don't consider inheritance to be in the same category.

 

[Iriemon]

The benefactors are the deceased, the beneficiaries are the ones who are inheriting the money. Just wanted to adress that, but, the point remains that the deceased already paid the taxes, whether or not it seems fair to a person currently paying income taxes the government is essentially designating that it deserves a second helping of the deceased persons money after it has already been taxed because they decide to leave an estate.

Look at it this way, they took taxes from the benefactor's income, the beneficiaries income, then they have the gall to take away form the estate after all of that, essentially, you are screwing both parties twice. Please forgive a quick analogy, if you buy something at the store at a generous price and then the store owner came back and said "oh, yeah, I added a second charge for taking the stuff out of the store" you'd be a little miffed right, well, essentially the government is adding a second charge for people having the nerve to die and leave their children a little better off.

Because I don't consider inheritance to be in the same category

OK on the terminology. Aside from your sales tax issue (I wrote a piece on that in the "fairtax" thread, I'd be interested in your comments), you seem hung up on the fact that the deceased paid a tax on the income, and now his estate is being taxed, and in your view, even though he's dead, he is being taxed again.

Would you have the same objection if there was no estate tax, but instead, heirs paid a tax on iheritance income? Now it is not the benefactor being taxed, it is the beneficiaries, whoever receives the gift.

I presume the answer would be yes, since (from your earlier answer) you think gifts should be tax exempt. Then everyone would want gifts instead of compensation. Rather than being paid a salary, everyone could just give gifts to each other. The tax system would fall apart. Aside from your desire to replace the income tax with a sales tax, that wouldn't work.

 

[LaMidRighter]

OK on the terminology. Aside from your sales tax issue (I wrote a piece on that in the "fairtax" thread, I'd be interested in your comments), you seem hung up on the fact that the deceased paid a tax on the income, and now his estate is being taxed, and in your view, even though he's dead, he is being taxed again.

It equates to the same thing

you think gifts should be tax exempt. Then everyone would want gifts instead of compensation. Rather than being paid a salary, everyone could just give gifts to each other. The tax system would fall apart. Aside from your desire to replace the income tax with a sales tax, that wouldn't work.

Come on now, let's be serious, do you really think the I.R.S. would let a system of "giving" go unpunished.

 

[Iriemon]

It equates to the same thing.

True, but the deceased is not being taxed twice -- you're primary objection.

Come on now, let's be serious, do you really think the I.R.S. would let a system of "giving" go unpunished.

Depends on what the law is. I guess if gifts were tax free, the IRS would right code defining when something is a gift (tax-free) and payment for services (taxed). I don't see the big difference. If I want to give my doctor a gift for making be better, why should that be penalized?

 

[LaMidRighter]

True, but the deceased is not being taxed twice -- you're primary objection.

Personal opinion I guess, but I am of the opinion that if the deceased's final wishes are hampered in any way by another tax then it would be double taxation, apparently it is open to interpretation however.

Depends on what the law is. I guess if gifts were tax free, the IRS would right code defining when something is a gift (tax-free) and payment for services (taxed).

Probably what would end up happening is the I.R.S. would probably asses anything up to fair market value of services, of course, knowing them they would probably go way past fair market value.

I don't see the big difference. If I want to give my doctor a gift for making be better, why should that be penalized?

I think we're kind of spinning our wheels since I completely agree with you that.

 

[Iriemon]

Personal opinion I guess, but I am of the opinion that if the deceased's final wishes are hampered in any way by another tax then it would be double taxation, apparently it is open to interpretation however.

I know we are going around and around on this. But why should we be worrying about whether the deceased's final wishes are hampered by an inheritance tax, and we are not concerned that his wishes are hampered when he pays his doctor by the income tax? Either way, his wishes are hampered. I see nothing magical about why his wishes should be unhampered because he makes a bequeathment versus paying his doctor.

Unless the goal is to give inter-generational transfers of wealth a tax exempt status to encourage wealth to remain in a family ... at the expense of working people who must pay a HIGHER tax to make up the difference.

If that in your opinion is a good objective, that's fine. I think it is contrary to the principal that the tax system should reward hard work, talent, and merit.

 

[LaMidRighter]

I know we are going around and around on this. But why should we be worrying about whether the deceased's final wishes are hampered by an inheritance tax, and we are not concerned that his wishes are hampered when he pays his doctor by the income tax? Either way, his wishes are hampered. I see nothing magical about why his wishes should be unhampered because he makes a bequeathment versus paying his doctor.

I'm against both forms of taxation so I guess it's a moot point.

Unless the goal is to give inter-generational transfers of wealth a tax exempt status to encourage wealth to remain in a family ... at the expense of working people who must pay a HIGHER tax to make up the difference.

I've said before in earlier threads that I don't really care about inter-generational transfers of wealth, I think that arguing about it just gives ammo to the class warfare advocates in this country and they are dangerous people.

If that in your opinion is a good objective, that's fine. I think it is contrary to the principal that the tax system should reward hard work, talent, and merit.

Rewarding hard work and merit are only one of the cornerstones of our American lifestyle however, I want to protect ALL of our people from the very thing that started our country in the first place, unfair taxation.

 

[Iriemon]

I'm against both forms of taxation so I guess it's a moot point.

If you are a proponent of the "fair" tax, you can expain why here:

http://debatepolitics.com/showthread.php?t=2727

 

[Hume]

I know we are going around and around on this. But why should we be worrying about whether the deceased's final wishes are hampered by an inheritance tax, and we are not concerned that his wishes are hampered when he pays his doctor by the income tax? Either way, his wishes are hampered. I see nothing magical about why his wishes should be unhampered because he makes a bequeathment versus paying his doctor.

Unless the goal is to give inter-generational transfers of wealth a tax exempt status to encourage wealth to remain in a family ... at the expense of working people who must pay a HIGHER tax to make up the difference.

If that in your opinion is a good objective, that's fine. I think it is contrary to the principal that the tax system should reward hard work, talent, and merit.

What aren't you getting here; you keep using the "oh boo hoo poor working families paying taxes on their income while rich kids get lots of money from their parents". THE PARENTS ALREADY WERE TAXED WHEN THEY EARNED THAT MONEY. They paid the same axes those poor working families did on their income. Why should they have to pay more because they have some money left over for their kids?

You keep saing the working families are going to have to take an increaed burden; but when they hand down money, they will also have the benefit of not being taxed on their willed money.

Unless the goal is to take a smaller percentage of money from poorer families so the wealthy will lose more money and the poor less. In which case that's communism.

 

[Iriemon]

What aren't you getting here; you keep using the "oh boo hoo poor working families paying taxes on their income while rich kids get lots of money from their parents". THE PARENTS ALREADY WERE TAXED WHEN THEY EARNED THAT MONEY. They paid the same axes those poor working families did on their income. Why should they have to pay more because they have some money left over for their kids?

Why do you think the parents are being taxed again? The parents aren't paying the tax again. They are dead. The people that inherit are effectively paying the tax. They have not paid any tax.

You keep saing the working families are going to have to take an increaed burden; but when they hand down money, they will also have the benefit of not being taxed on their willed money.

Tax free transfers in bequeathments doesn't help the guy who is worker for a living at all. I'm am going to leave some money to my kids. If Paris pays tax on her inheritance income and as a result the tax I pay on my income is lower, I'll be able to keep more money and have more to leave to my kids.

Unless the goal is to take a smaller percentage of money from poorer families so the wealthy will lose more money and the poor less. In which case that's communism.

I could make an argument that people who inherit ought to pay a higher tax because they didn't earn it, but that would be getting into the wealth distribution area. In fact, I agree that the top estate tax rate of 55% is too high and should not be any higher than the top rate of the income tax.

So I'm not saying tax heirs more than anyone else. Just that they shouldn't be in a privileged, tax free status. They should have to pay the same tax on their inheritance income as everyone else pays on their income. Simple as that.

 

[Keepstar1331]

Well, being on the recieving end of what could be a couple million dollar cash out when my dad dies, i don't think there should be an inheritence tax. i'm not some heiress who just waves around daddy's credit card, and shops all day. My dad went to a year of community college, then worked his way up. He owns one business, soonto be two, and is developing properties on the side. Why should i be taxed on what my father has worked hard for? Instead of leaving me money, he's leaving me realestate which i can sell or keep if i see fit. And a business which i can keep or sell as i see fit.

He has already paid taxes on his income, why should my family be taxed twice?

 

[Iriemon]

Well, being on the recieving end of what could be a couple million dollar cash out when my dad dies, i don't think there should be an inheritence tax. i'm not some heiress who just waves around daddy's credit card, and shops all day. My dad went to a year of community college, then worked his way up. He owns one business, soonto be two, and is developing properties on the side. Why should i be taxed on what my father has worked hard for? Instead of leaving me money, he's leaving me realestate which i can sell or keep if i see fit. And a business which i can keep or sell as i see fit.

He has already paid taxes on his income, why should my family be taxed twice?

Good question. Why should I (or anyone else who works) pay a higher tax on what I worked hard for so you can be tax-free for something you didn't work for at all?

That's the answer.

 

[Keepstar1331]

Your implying that i've never had a job in my life. I've been working since 15 and my sister since 14. We've been taxed. My father has been considered middle class until very recently. So he has been taxed the same way you have. i never said you should be taxed higher, on the contrary i think that the more income you make you should be taxed higher.

i will still have top pay property taxes on the house(s) and business(s).

But if we're going to tax inheritance (which in my opinion is a gift) why not tax every other monatary gift you receive. That hundred bucks on your birthday, The thousands you got for graduation, i got a car for graduation should i be taxed for that too?
i will still have top pay property taxes on the house(s) and business(s).

 

[jamesrage]

The estate tax, or the "death tax" as President Bush like to call it, is a tax on the estate of a deceased. Under the tax reforms passed by the Republicans in Bush's first term the estate tax is slowly being eliminated (by increasing the exemption level, now at $1.5 million per parent, I believe) until the end of the decade when the tax will disappear. This elimination, however, has a sunset clause and the tax will come back into existance unless the repeal is made permanent.

This topic was discussed somewhat in the "flat tax" thread, but I think deserves a thread of its own. I didn't see a thread on this previously, so started this new one.

Should estates be taxed? Or to put it another way, should people inherit assets tax free?

I would say that there should not be a inheritance tax,because the deceased already paid taxes on it when he recieced his paycheck,he paid taxes on it when he earned interest and he paid taxes when when he bought the property and he paid property taxes on the property every year.So the way I way I look at it the government has no business taxing it when someone passes thier property and other assets down to someone else.

 

[Iriemon]

Your implying that i've never had a job in my life. I've been working since 15 and my sister since 14. We've been taxed. My father has been considered middle class until very recently. So he has been taxed the same way you have. i never said you should be taxed higher, on the contrary i think that the more income you make you should be taxed higher.

i will still have top pay property taxes on the house(s) and business(s).

But if we're going to tax inheritance (which in my opinion is a gift) why not tax every other monatary gift you receive. That hundred bucks on your birthday, The thousands you got for graduation, i got a car for graduation should i be taxed for that too?
i will still have top pay property taxes on the house(s) and business(s).

I am certainly not suggesting you should have to pay taxes on assets you earned. I think that gifts should be taxed, and in fact they are.

I do not have a problem with the concept of a reasonable exemption for gifts/bequeathments. I disagree with the concept there should be no tax at all.

If people do not have to pay a tax on money they inherit, that tax revenue has to come from some other source. Currently that other source is mainly income and FICA taxes. Therefore, if people who inherit pay no tax, people who are taxed based on what they earn have to pay a higher tax.

 

[Iriemon]

I would say that there should not be a inheritance tax,because the deceased already paid taxes on it when he recieced his paycheck,he paid taxes on it when he earned interest and he paid taxes when when he bought the property and he paid property taxes on the property every year.So the way I way I look at it the government has no business taxing it when someone passes thier property and other assets down to someone else.

Should the doctor who gets paid for taking care of the deceased before he dies be taxed on what the deceased paid him? Why? The deceased already paid taxes on it when he received his paycheck, he paid taxes on it when he earned interest and he paid taxes when when he bought the property and he paid property taxes on the property every year. So why does the government have any business taxing it when the deceased passes his property and other assets to the doctor?