If the Democrats just had some balls...

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Originally Posted by Nessus

How can you over-intellectualize something? What do the processes that brought us here even matter when making sweeping policies of entire nations? You're sounding more and more like a Palin-esque demagogue.

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Seriously, you're not making any sense here.

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Originally Posted by GGT

Yet, you've also complained about taxing the upper 2% income earners, on a scale that's proportionate to what middle income earners pay. :hmm: ...If it's about assets, for things like stock holdings as well as real estate, there's more than one way to skin a cat --- the Executor is supposed to get a market valuation on date of death (DOD), and another date of purchase (DOP) valuation. IIRC, they can choose the lower valuation for tax payments. Not a bad deal. They can sell estate stocks and pay the capital gains tax, which is still low at 15%, to balance out losses with gains. It's the estate paying its own 'income' taxes. I think you've been looking at this whole thing in a goofy way, no offense.

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For the third time, it's not about earners it's about assets. How can you keep blurring what's actually a very clear distinction?

The executor can't make up a value for the assets of a liquid, marketable asset like a stock. The date-of-death valuation is held and the estate is forced to sell to raise the cash if needed, even if those gains are all unrealized stock market gains.

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It's no more arbitrary than the "over $250,000" income bracket is more than $30,000-$50,000 is average income. Retirement planners have said a typical couple retiring today will need X amount in income-producing assets, to not outlive their money before they're 85 years old. X is currently more than $1 million but under the $5 million mark....Anyway, the point is, Estate tax is more like a tax for that final year of income, as if they'd sold everything in their final days. It's taxable.

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The income tax assumes what you said before, that someone making money is doing well for themselves. An asset tax is like a property tax, it just sees a big pile of gold and reaches out for it.

Why should people be forced to sell their assets before they die? Why should we actively try to prohibit significant long-term capital accumulation? Especially in the US, where we have so many African-Americans who are becoming wealthy for the first time in the history of their families. To discourage that money from staying within their communities seems to be especially...quizzical.

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Originally Posted by Aimless

er wait WHY isn't leaving your money to your kids a transaction??

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Because they are your kids and it's a single family unit. Taxing exchanges between them is silly.

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A long but very readable summary of the various ways these kinds of laws don't make sense: http://www.ustreas.gov/offices/econo...ments/ed_m.pdf

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Originally Posted by Dreadnaught

Seriously, you're not making any sense here.

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We rarely manage to make contact :(

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Originally Posted by Dreadnaught

Seriously, you're not making any sense here.



For the third time, it's not about earners it's about assets. How can you keep blurring what's actually a very clear distinction?

The executor can't make up a value for the assets of a liquid, marketable asset like a stock. The date-of-death valuation is held and the estate is forced to sell to raise the cash if needed, even if those gains are all unrealized stock market gains.



The income tax assumes what you said before, that someone making money is doing well for themselves. An asset tax is like a property tax, it just sees a big pile of gold and reaches out for it.

Why should people be forced to sell their assets before they die? Why should we actively try to prohibit significant long-term capital accumulation? Especially in the US, where we have so many African-Americans who are becoming wealthy for the first time in the history of their families. To discourage that money from staying within their communities seems to be especially...quizzical.




Because they are your kids and it's a single family unit. Taxing exchanges between them is silly.

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A long but very readable summary of the various ways these kinds of laws don't make sense: http://www.ustreas.gov/offices/econo...ments/ed_m.pdf

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Your attempt to make this about caring for African Americans is silly.

The question is not why we should encourage or discourage anything at all. What we have is a society that needs money for its upkeep. That is the why of taxation. You have so far not given any logical reason as to why it makes more sense to tax the living than to tax the dead. The dead are not going to suffer because of a 100% estate tax, the living on the other hand will get a significantly bigger part of their income disposable (if not all). The incentive for people to earn more would still be there as it would enable them to have a better life. Once their life is over their assets flow back into the commonwealth (literally) to provide for schools, roads, police, firemen etc etc etc which you don't have to burden the living with then.

You don't need a payroll tax, you don't need an income tax, you don't need a capital gains tax or a whole plethora of other taxes. The IRS pretty much would go out of business altogether. Small government as you like it and a tax-system with no loopholes. Death and taxation, both inevitable, would occur at the same moment and it's due only once.

It's also highly meritocratic, the best performers have the best life. Your own capacities decide if you're going to make it in society, not your daddy's estate. George W. Bush having no headstart over Barry Obama, that sounds pretty fair to me.

very persuasive!

and dread, er, if those kids are adults then i'm not sure we can speak of family units in the conventional sense. are they treated as dependents eg. in insurance??

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Do you mean what's the point of a sales tax? I guess it's seeing trade as commerce, or a financial transaction with a behavior that's loosely defined as 'work' or 'service'? Some states don't have a sales tax, or an income tax, ya know. Taxes aren't designed just to increase gov't budgets.....but there are gov't services that need to be funded, with taxes. How else would it be done?

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Gift Tax. I don't like the idea of gift tax. Why do we need one, is it to close certain loop holes?

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It's also highly meritocratic, the best performers have the best life. Your own capacities decide if you're going to make it in society, not your daddy's estate. George W. Bush having no headstart over Barry Obama, that sounds pretty fair to me.

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This is actually pretty unrealistic view of the world. Who you know, and who you are make such a huge difference. Did you ever work at any large business, or a small one even? Did you ever go to a private high school? Did you not notice the rich kids getting off for what they did, or their grades being changed to pass classes? Or in any place you've worked, who gets hired, family of the owner, his friends, do they have to be good? No not really.. can they mess up and not get fired, ya. The same in government, the same in everything.

That said, I do believe that anyone hypothetically could be the next Obama, the next Warren, the next whoever either on a different scale or smaller scale. It's definitely possible to break out of poverty through hard work, and having some talent helps :P. It is MUCH harder than your wealthy counter part, and the job positions are less secure, fewer, and face higher competition for significant work. I agree it's possible for anyone to succeed, but your starting position in life matters a lot.

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Originally Posted by Dreadnaught

For the third time, it's not about earners it's about assets. How can you keep blurring what's actually a very clear distinction?

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I addressed why ASSETS are taxed. You just didn't like the answer.

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The executor can't make up a value for the assets of a liquid, marketable asset like a stock. The date-of-death valuation is held and the estate is forced to sell to raise the cash if needed, even if those gains are all unrealized stock market gains.

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Nothing is "made up". You can find recorded share prices for every market day by CUSIP number, going back decades. The difference between purchase price and DOD value can be used, OR the DOD face value, whichever is less. Generational gifts or inheritance of stocks is so complicated, we need special attorneys and accountants to sort it all out. And you really don't want to be an Executor of an Estate, it's a major pain in the ass.

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The income tax assumes what you said before, that someone making money is doing well for themselves. An asset tax is like a property tax, it just sees a big pile of gold and reaches out for it.

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Great, now you're gonna bring in property taxes! Look, we all know our tax code is fubar. Ownership of cars is also taxed, from time of purchase to registration and inspections, year after year. I'm even taxed for living in this township, it's called a Resident tax. Professionals are taxed for their presence in the county, it's called a Business tax. Some things are called Fees instead of taxes.

Fact is, we need to fund public services somehow. You make it sound like taxes have a life of their own, sniffing around for piles of gold or something. Taxes aren't inherently evil, any more than gummints or public services are evil. We could do a better job at the whole scheme, everyone agrees on that.

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Why should people be forced to sell their assets before they die? Why should we actively try to prohibit significant long-term capital accumulation? Especially in the US, where we have so many African-Americans who are becoming wealthy for the first time in the history of their families. To discourage that money from staying within their communities seems to be especially...quizzical.

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Again, WTF does being black have to do with anything? :confused: I think you're going about this backward: in planning for your mom's assets, especially her apartment, you're getting the first taste of that end of taxes. You're understandably trying to preserve her assets and keep them in the family. Should policy be made that way? :hmm:

<And people are "forced" to sell their assets before they die all the time....because we don't have a comprehensive or affordable healthcare system, or an effective retirement / old-age pension system. Refer to Aimy's thread on social welfare. :( >

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Originally Posted by Hazir

Here in Holland we do have an actual estate tax and giving money is not taxed, but recieved money is taxed as income. For money recieved from your parents there are some exemptions that are rather low. The idea behind that the welfare/healthcare system picks up the bill for those who can't afford nursing home costs through a means tested program. They didn't want people with actual means to give away what they own before the bill arrives.

The rule is enforced in a rather draconic way; even significant gifts in the past can be taxed retro-actively if they are found out. A sudden drop in equity of €50,000 would need a very good explanation.

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There are a bunch of other exemptions, too, e.g. charities are completely exempt (ANBI's).


Dread, two things:
- Property/ asset taxes - there is the point that the more you have, the more you stand to gain by government services (police/fire protection is worth more if you have more).
- If you have to spend everything before you die, isn't that a huge stimulus to the economy as well? I thought saving was bad, money needs to be spent ;)

I didn't really understand what Hazir said. Giving money isn't taxed, but they'll retro-actively audit gifts that drop equity, and levy a tax? huh? :confused:

No, the tax burden (and duty to report it, I assume), is on the recipient. But if your money disappears, they're going to check where it went.

At least, I think that is what he meant!

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Originally Posted by Flixy

No, the tax burden (and duty to report it, I assume), is on the recipient. But if your money disappears, they're going to check where it went.

At least, I think that is what he meant!

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Yep.

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Originally Posted by Lebanese Dragon

Gift Tax. I don't like the idea of gift tax. Why do we need one, is it to close certain loop holes?


This is actually pretty unrealistic view of the world. Who you know, and who you are make such a huge difference. Did you ever work at any large business, or a small one even? Did you ever go to a private high school? Did you not notice the rich kids getting off for what they did, or their grades being changed to pass classes? Or in any place you've worked, who gets hired, family of the owner, his friends, do they have to be good? No not really.. can they mess up and not get fired, ya. The same in government, the same in everything.

That said, I do believe that anyone hypothetically could be the next Obama, the next Warren, the next whoever either on a different scale or smaller scale. It's definitely possible to break out of poverty through hard work, and having some talent helps :P. It is MUCH harder than your wealthy counter part, and the job positions are less secure, fewer, and face higher competition for significant work. I agree it's possible for anyone to succeed, but your starting position in life matters a lot.

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I would concur it's slightly optimistic, but it sure would level the playing field dramatically. And yes, I know what those privileged circles mean, first hand experience.

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Originally Posted by GGT

I didn't really understand what Hazir said. Giving money isn't taxed, but they'll retro-actively audit gifts that drop equity, and levy a tax? huh? :confused:

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Funny by the way how you didn't understand this after posting about the same problem being addressed in that article from the NYT you posted yourself.

Hazir, I meant your description of how the Dutch do it wasn't clear to me. Gift-givers aren't taxed. But if an audit shows the gifts were made only to qualify for state aid, gift-givers are taxed?

The NYT article showed how spousal refusal is being used to protect the healthy spouse, since long term care is so expensive. It said the state will SUE people who do that.....

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Originally Posted by Dreadnaught

I meant in the sense that employers are simply paying a tax that employees owe. Though I should have perhaps referred to it as a payroll withholding tax.

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The tax is formally levied on both. Part of it comes from the employee, as a witholding, and part comes from the company. You can argue, as Lewk did, that the company simply passes it's share of the tax on, I can argue that employees do the same.

Several of you seem to be acting as if I am against taxation whatsoever, which is far from the case. You're also acting as if these kinds of taxes actually raise a lot of revenue, which is also far from the case.

My position is that this tax is immoral, because I think it's immoral to tax assets. And that it's immoral to tax someone's savings that they intend to give to their children. It doesn't matter the amount or the exemptions, I find the concept to be odious.

A few points:

1) For the record I mostly support progressive income taxes. But this tax puts progressivism in the wrong place by taxing savers and threatens to destroy intergenerational capital appreciation. A society that can't look forward to building up assets over time turns the money side of life into a zero-sum game.

2) A reasonable tax code should encourage savings, thrift and helping the next generation through gifts, investments, etc. It shouldn't leave people with the option of blowing out their cash on an obnoxious lifestyle to die broke or seeing their hard-earned money disappear into a government black hole.

3) The idea that the wealth one accumulates over time should be "returned" to society via government confiscation is frankly bonkers. Someone's savings and assets have already been taxed as income when they made it. Taking it away after they die is senseless. The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

But who will pay for the exquisite lining on those bloody jackboots?

Income, corporate and sales taxes should suffice. :o

Dread, assets aren't taxed until they're put into some sort of action. Then it becomes a transaction, and most transactions are either taxed, or credited from taxes. You know that.

I understand your "morality" and intent issue, but you're not doing a very good job at justifying either. According to your presentation, the fortunes of the "robber barons" should have been passed onto their legal heirs, tax free? Money makes money, and money buys power, keep the legacies intact? (Never mind that their fortunes were gained by exploiting both the worker and our legislature. Is that old history yet?)

Let's be honest here. Americans who inherit assets have a leg-up on everyone else. Old Money is treated differently from Nouveau Riche. But WHY?

First and second generation workers and savers are being hurt by current monetary and fiscal policy. Being thrifty has turned into retirees using a spousal refusal, just to afford long-term aged care. When the tide goes out, how many people do you really want swimming without trunks?

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Originally Posted by Dreadnaught

Income, corporate and sales taxes should suffice. :o

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You getting something of value, whether you earned it or not, is income. Do you deny that?

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Originally Posted by Dreadnaught

Income, corporate and sales taxes should suffice. :o

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But you've also balked at income, corporate, and sales taxes. Then you added dividend and asset taxes. Then you added inheritance taxes. If you're not against taxation "whatsoever", and you want social liberalism to pay for itself.....what's your proposal?

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2) A reasonable tax code should encourage savings, thrift and helping the next generation through gifts, investments, etc. It shouldn't leave people with the option of blowing out their cash on an obnoxious lifestyle to die broke or seeing their hard-earned money disappear into a government black hole.

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And our healthcare system shouldn't force couples to enact a "spousal refusal" option, just to afford long-term care. The uber wealthy don't have to worry about this, but everyone else does. Including upper-middle-class. I seem to remember that you were against a Public Option in the healthcare debate. Have you changed your mind or reconsidered the alternatives yet?

:donkey:

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Originally Posted by GGT

Dread, assets aren't taxed until they're put into some sort of action. Then it becomes a transaction, and most transactions are either taxed, or credited from taxes. You know that.

I understand your "morality" and intent issue, but you're not doing a very good job at justifying either. According to your presentation, the fortunes of the "robber barons" should have been passed onto their legal heirs, tax free? Money makes money, and money buys power, keep the legacies intact? (Never mind that their fortunes were gained by exploiting both the worker and our legislature. Is that old history yet?)

Let's be honest here. Americans who inherit assets have a leg-up on everyone else. Old Money is treated differently from Nouveau Riche. But WHY?

First and second generation workers and savers are being hurt by current monetary and fiscal policy. Being thrifty has turned into retirees using a spousal refusal, just to afford long-term aged care. When the tide goes out, how many people do you really want swimming without trunks?

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Ummm, yes assets are taxed by an estate tax. That's the point. You're forced to realize gains/losses on assets to pay the tax. :confused:

I've never said there should be no corporate, dividend or income taxes. I've said that I disagree with the rates, loopholes, etc.

But now you're getting into this ugly re-distributionist populism gambit. As if the existence of some wealthy dude out there is detrimental to you and me. And that you and I should get something from someone who saves an arbitrarily high number and wants to pass that money on to their kids. That inheritance alone is a sin. Maybe this is a religious thing, but I don't believe in that kind of original sin.

And can we please stop just inserting random things we both read in the New York Times into the discussion? It not irrelevant.

If the Democrats had some balls.....the "Obamacare" bill would have included a Public Option.

In fact, if we had a Public Option, we could scale down Medicare and Medicaid. Over time, with a Public Option, we might be able to dismantle Medicare and Medicaid. Even retract tax payer subsidies for those programs. If the private insurance industry is going to move along, acting as a monopoly in its own interest, why shouldn't they have some competition? Why shouldn't the consumer have an alternative?

Really, if we don't break up the Insurance Industry monopoly because some say it's against Freee Market principles, then what's so bad about opening that same Freee Market with a Public Option?

*Facepalm* Alright, I've said my piece. No need to walk into a wall of ranting talking points that aren't relevant to what we're discussing. Good talk though.

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Originally Posted by Dreadnaught

*Facepalm* Alright, I've said my piece. No need to walk into a wall of ranting talking points that aren't relevant to what we're discussing. Good talk though.

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:picard:

Now don't fade away into the night, just because I tried to bring the thread back to its origins. Like I said earlier, you have some balls turning the discussion into Death taxes, when that's the least of our problems. It's been a "good talk" for a couple of pages, but we're nowhere close to addressing foundational issues, let alone how to fix them.

(Plus, you must have posted while I was typing)

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But now you're getting into this ugly re-distributionist populism gambit. As if the existence of some wealthy dude out there is detrimental to you and me. And that you and I should get something from someone who saves an arbitrarily high number and wants to pass that money on to their kids. That inheritance alone is a sin. Maybe this is a religious thing, but I don't believe in that kind of original sin.

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Hey, stop that. You're the one who brought up morality and odious "sins" for taxing people transferring their wealth. And you're the first to mention religiosity in this thread. Should I ask you if that's because you're a Jew? :donkey:

Obviously, religiosity has nothing to do with it. Unless, of course, our god-idol is making money for purely selfish reasons. (Image of greedy person getting a hard-on stroking their pile of coins. Insert cackling laugh. Or "Precious".....)

My grandparents on both sides are dead now, but I was around to watch the process of death and estate transactions, including their remarriages. I've also buried both my (divorced) parents. That's six burials and six estates to sort out, even more counting their second marriages. I've also been through the divorce process with minor children. I've buried a beloved mother-in-law, and my only Uncle recently. My ex-husband is preparing to marry a divorced woman with her own children and grandchildren. Yeah, I'm going to ask that he re-do his Will so our kids can be a priority if/when he dies, but it's not something I can force or enforce.

In the end, passing on financial assets is a double-edged sword, while looking like a grand goal.

It might make me FEEL better as a parent to have this contingency plan upon my untimely death, but the parenting that matters most was done while I was/am alive. Most parents don't die when their kids are very young, not any longer. When my dad died, he left a life insurance policy and a mortgage pay-off policy. I was the beneficiary because I was still young. He was a good planner and knew how and when to change these policies (both my sisters were married or independent at the time).

Having lost my father at a relatively young age led me to plan for my own kids. It also raised my awareness of parents and their kids who may NOT be able to do that. That's when society and/or government needs to step in, step up to the plate. I want my tax dollars to do that. I expect my tax dollars to do that. Go ahead and redistribute my wealth, tax the hell out of me, so as long as it comes with a redistribution of my values: education, community, compassion. See every young child as your own baby, and every elderly geezer as your own Mom or Dad.

Dread, if your parents bequeath their wealth to someone outside your family (not a charity), should that person be taxed for the income received?

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Originally Posted by Dreadnaught

Several of you seem to be acting as if I am against taxation whatsoever, which is far from the case. You're also acting as if these kinds of taxes actually raise a lot of revenue, which is also far from the case.

My position is that this tax is immoral, because I think it's immoral to tax assets. And that it's immoral to tax someone's savings that they intend to give to their children. It doesn't matter the amount or the exemptions, I find the concept to be odious.

A few points:

1) For the record I mostly support progressive income taxes. But this tax puts progressivism in the wrong place by taxing savers and threatens to destroy intergenerational capital appreciation. A society that can't look forward to building up assets over time turns the money side of life into a zero-sum game.

2) A reasonable tax code should encourage savings, thrift and helping the next generation through gifts, investments, etc. It shouldn't leave people with the option of blowing out their cash on an obnoxious lifestyle to die broke or seeing their hard-earned money disappear into a government black hole.

3) The idea that the wealth one accumulates over time should be "returned" to society via government confiscation is frankly bonkers. Someone's savings and assets have already been taxed as income when they made it. Taking it away after they die is senseless. The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

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Quoting for new page reference.

He said it's Immoral to tax assets. Shouldn't matter whose assets, it's just Immoral.

Also Immoral to tax savings. Would it matter who the recipient of that savings is? He said the amount and exemptions don't matter, so why should the beneficiary matter? He finds the whole thing ODIOUS.

1) Ah, liberalism's fault is.....failing to recognize special people?

2) Right-o. It's those damn taxes that keeps us from saving? Or is it those damn kids, that next ungrateful and spoilt generation for whom you've blown your gifts?

3) You're right, the wealth I inherited has already been taxed. Some of that was CONFISCATED to help others less fortunate. Pretty sure my grandparents and parents had no objections to that. In fact, they expected that. As do I. I know full well that when I die, my Estate will provide for my children plus some others. I can't name them all, but the tax money will find its way like water follows gravity.

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The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

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Re-write: The main goal of life is feeding your children and giving them something to build their lives from. By giving some tax dollars to the government, you're also helping others outside your family unit. It's called Community.

okay just what the hell is going on in this thread???

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Originally Posted by Dreadnaught

Income, corporate and sales taxes should suffice. :o

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But this is income. Why again is taxing unearned income worse than taxing earned income?

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Originally Posted by Aimless

okay just what the hell is going on in this thread???

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The US is in the process of voting on tax policy, with a lame duck congress, before the end of the calendar year.

Dread chose the inheritance tax as his pet peeve.

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Originally Posted by RandBlade

But this is income. Why again is taxing unearned income worse than taxing earned income?

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Income is income. Profit is profit. I've never quite understood our tax policies, to be honest. We tax long term capital gains and dividends at half the rate of labor. Seems backward. I can sit here and make profit without lifting a finger, while workers have to actually do some work. They get taxed for working, but I'm not taxed for NOT working?

The whole system is fucked up.

CGT rarely involves 'not working'.

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Originally Posted by Dreadnaught

3) The idea that the wealth one accumulates over time should be "returned" to society via government confiscation is frankly bonkers. Someone's savings and assets have already been taxed as income when they made it. Taking it away after they die is senseless. The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

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So you didn't even bother to read on. The idea is a 100% death tax in stead of other taxation.

Now, your position begs some questions

1. why is it better to tax the activities of the living than the estates of the dead?

2. what besides your sense of entitlement make that you think you have a claim to the estate of your parents ?

3. do you feel in some way that what is their's is actually your's?

4. how do you think your parents would feel if you would tell them that you feel they should manage their estate responsably in order for you to get a bigger inheritance?

5. do you think it would be an immoral act for parents to actually spend all they own before they die?

6. do you think parents who die with a net worth of zero are bad parents?

Basically it's a moral issue and I agree with Dread that it's immoral.

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Originally Posted by Being

Dread, if your parents bequeath their wealth to someone outside your family (not a charity), should that person be taxed for the income received?

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Absolutely.

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Originally Posted by RandBlade

But this is income. Why again is taxing unearned income worse than taxing earned income?

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Because your conception of "earned" is coming from the wrong angle. This is more about the rights of the person who earned the money to leave the entirety of their savings to their family, not really the right of their family to receive money.

And the concept applies to issues beyond death. Over here, parents often contribute significantly to the college education expenses of their children even when they are legally adults. The concept that a parent-to-child donation like this -- or during any stage of life -- should be taxed is odious to me. I'm going to pay for my kids education.

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Originally Posted by Hazir

So you didn't even bother to read on. The idea is a 100% death tax in stead of other taxation.

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That's actually a worse idea. :bulb: It means that no one besides corporations can accumulate long-term assets. It would also roil stock, housing and mortgage markets because people would be forced to sell assets all the time to pay the government taxes whenever someone dies. In countries with age structures like yours, it would lead to a slow acceleration of sell-offs and a pretty rapid degradation of capital stock.

To answer some of your other questions, our estates are actually taxing the dead estates, literally. As in, the recipients of an estate don't get taxed directly. The estate is taxed upon death and the remainder is distributed to the heirs. So someone leaving behind $10 million for her five children doesn't have $2 million packaged for each kid who then pays a tax. The whole $10 million is liquidated, taxed for estate taxes + capital gains, then the remainder is distributed. Given the tax rates it makes a massive difference in the amount of money given the various tax rates.

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange. This is what families do for each other. If my parents somehow aren't able to leave anything to me and my siblings, we would be fully expected to support them in their later years and we wouldn't question that except maybe if our parents were horrible or financially wasteful people. But this whole issue of intergeneration support and wealth transfer isn't an alien concept.

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Originally Posted by Dread

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange.

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You seem to find views contrary to your own incomprehensible; I like the devotion to a cause, but it makes discourse difficult.

It's not about being difficult, it's about being perplexed. I honestly think almost everyone in the world who has had a child or been a child would find it strange to be so hostile and suspicious of family financial support.

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Originally Posted by Dreadnaught

Absolutely.



Because your conception of "earned" is coming from the wrong angle. This is more about the rights of the person who earned the money to leave the entirety of their savings to their family, not really the right of their family to receive money.

And the concept applies to issues beyond death. Over here, parents often contribute significantly to the college education expenses of their children even when they are legally adults. The concept that a parent-to-child donation like this -- or during any stage of life -- should be taxed is odious to me. I'm going to pay for my kids education.



That's actually a worse idea. :bulb: It means that no one besides corporations can accumulate long-term assets. It would also roil stock, housing and mortgage markets because people would be forced to sell assets all the time to pay the government taxes whenever someone dies. In countries with age structures like yours, it would lead to a slow acceleration of sell-offs and a pretty rapid degradation of capital stock.

To answer some of your other questions, our estates are actually taxing the dead estates, literally. As in, the recipients of an estate don't get taxed directly. The estate is taxed upon death and the remainder is distributed to the heirs. So someone leaving behind $10 million for her five children doesn't have $2 million packaged for each kid who then pays a tax. The whole $10 million is liquidated, taxed for estate taxes + capital gains, then the remainder is distributed. Given the tax rates it makes a massive difference in the amount of money given the various tax rates.

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange. This is what families do for each other. If my parents somehow aren't able to leave anything to me and my siblings, we would be fully expected to support them in their later years and we wouldn't question that except maybe if our parents were horrible or financially wasteful people. But this whole issue of intergeneration support and wealth transfer isn't an alien concept.

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Actually I am shocked about your mental laziness; you are so entrenched in the incumbent situation that you won't consider alternatives. Your 'need to sell' argument is moot if the estate flows into the commonwealth, but what's more important is why is it intrinsically better to tax the living than taxing the dead?

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Originally Posted by Dreadnaught

Because your conception of "earned" is coming from the wrong angle. This is more about the rights of the person who earned the money to leave the entirety of their savings to their family, not really the right of their family to receive money.

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Transactions are taxable.

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And the concept applies to issues beyond death. Over here, parents often contribute significantly to the college education expenses of their children even when they are legally adults. The concept that a parent-to-child donation like this -- or during any stage of life -- should be taxed is odious to me. I'm going to pay for my kids education.

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Educational costs can be tax deductible. Donations (gifts) up to ~$15,000 are also tax deductible. Parents get 'preferential' tax treatment from all sorts of deductions and credits for 18-24 years.

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To answer some of your other questions, our estates are actually taxing the dead estates, literally. As in, the recipients of an estate don't get taxed directly. The estate is taxed upon death and the remainder is distributed to the heirs. So someone leaving behind $10 million for her five children doesn't have $2 million packaged for each kid who then pays a tax. The whole $10 million is liquidated, taxed for estate taxes + capital gains, then the remainder is distributed. Given the tax rates it makes a massive difference in the amount of money given the various tax rates.

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Like I said, the deceased is paying their final year of 'income taxes'. Estates do NOT have to be liquidated before distribution. Some things are deductible, like costs of a CPA and funeral expenses, even donations (like that $1 million gift to a university library). I'm pretty sure even probate court and tax attorney fees are deductible. Penty of ways to reduce the estate tax bill.

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I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange. This is what families do for each other. If my parents somehow aren't able to leave anything to me and my siblings, we would be fully expected to support them in their later years and we wouldn't question that except maybe if our parents were horrible or financially wasteful people. But this whole issue of intergeneration support and wealth transfer isn't an alien concept.

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Then have your folks see an estate planner or financial advisor, set up a Trust Fund or Revocable Trust for their heirs. You make it sound like people can't leave money or assets to family without the whole thing being taxed to zero, and that's just not true. It would take an effort, but only because our tax code is fubar (and designed for attorneys and accountants).

If this bill is adopted, anything under $5 million will have a ZERO tax. What's your objection to that?

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Originally Posted by Hazir

Actually I am shocked about your mental laziness; you are so entrenched in the incumbent situation that you won't consider alternatives. Your 'need to sell' argument is moot if the estate flows into the commonwealth, but what's more important is why is it intrinsically better to tax the living than taxing the dead?

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The "estate flows into the commonwealth"? That's...okay, before I try to address this, could you clarify what that means to you?