Quote Originally Posted by Dreadnaught View Post
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.
Transactions are taxable.

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.
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.


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.
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.

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.
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?