No Country For Old Men
December 17, 2009 9:52 AM Subscribe
On January 1st, the U.S. estate tax will disappear. For exactly one year. Then it will come back higher on Jan. 1, 2011. Will lots of old rich people die?
Bush's 2001 tax reform law gradually reduced the estate tax to what is now 45%, with an exemption of the first $3.5 million. During 2010, there is no tax at all. In 2011, the pre-Bush tax resumes (55%, $675,000 exemption.)
Dem. Senator Max Baucus expects to pass a retroactive tax next year. Republicans, while calling for total repeal, have offered 35% and $5 million.
Estate tax previously: 1 2 3 4
Bush's 2001 tax reform law gradually reduced the estate tax to what is now 45%, with an exemption of the first $3.5 million. During 2010, there is no tax at all. In 2011, the pre-Bush tax resumes (55%, $675,000 exemption.)
Dem. Senator Max Baucus expects to pass a retroactive tax next year. Republicans, while calling for total repeal, have offered 35% and $5 million.
Estate tax previously: 1 2 3 4
Whoa whoa whoa--you have to let dead people keep at least $5 million--how else are they gonna lie there decomposing in the style to which they've become accustomed?
posted by DU at 9:55 AM on December 17, 2009 [6 favorites]
posted by DU at 9:55 AM on December 17, 2009 [6 favorites]
Next year would seem to be the year to poison your rich old uncle with cyanide.
Dear AskMe: Hypothetically speaking, how would one procure some cyanide?
posted by joe lisboa at 9:55 AM on December 17, 2009 [4 favorites]
Dear AskMe: Hypothetically speaking, how would one procure some cyanide?
posted by joe lisboa at 9:55 AM on December 17, 2009 [4 favorites]
You can take it with you.
posted by joe lisboa at 9:56 AM on December 17, 2009
posted by joe lisboa at 9:56 AM on December 17, 2009
The freakonomics guys have been talking about this all year, anticipating when/if it'd actually happen. I can't wait to see the 2009 vs. 2010 vs. 2010 death rates for upper class Americans. How many grandparents on their deathbeds will hold on through the rest of this month until Jan 1st?
My guess is that there will be significant differences between years, but jeez, I hope crazy old money families don't start killing off their elders.
posted by mathowie at 9:57 AM on December 17, 2009
My guess is that there will be significant differences between years, but jeez, I hope crazy old money families don't start killing off their elders.
posted by mathowie at 9:57 AM on December 17, 2009
There are far better, less detectable poisons. Besides, the best option is always poison by absence. Especially in old people.
... not that I have given much consideration to this. Not at all.
posted by strixus at 9:57 AM on December 17, 2009
... not that I have given much consideration to this. Not at all.
posted by strixus at 9:57 AM on December 17, 2009
This should be the year where countless spoiled nephews and nieces plot to kill their doddering old relatives, making next year the year we trot out the Marples and Poirots to crack the cases.
posted by Sticherbeast at 9:58 AM on December 17, 2009 [7 favorites]
posted by Sticherbeast at 9:58 AM on December 17, 2009 [7 favorites]
Is it time already to dig up this legendary AskMe thread?
posted by MuffinMan at 10:01 AM on December 17, 2009 [1 favorite]
posted by MuffinMan at 10:01 AM on December 17, 2009 [1 favorite]
Prediction:
In 2011 the Republicans will scream bloody murder about the "Death Tax", and more important, just claim that the reappearing estate tax is "the biggest tax increase in America's history" without mentioning that it's the estate tax they're talking about. All the Republican talking heads will go on, endlessly, about how horrible it is that Obama wants to raise taxes during economic hard times.
The Democrats, as they have every single other time the Republicans threw a random temper tantrum, will rush to the "center" and agree, at the very least, to a greatly reduced estate tax, but more likely will simply end the estate tax on a permanent basis. We will then be told that without 70 votes in the Senate the Democrats are powerless to do anything....
posted by sotonohito at 10:02 AM on December 17, 2009 [35 favorites]
In 2011 the Republicans will scream bloody murder about the "Death Tax", and more important, just claim that the reappearing estate tax is "the biggest tax increase in America's history" without mentioning that it's the estate tax they're talking about. All the Republican talking heads will go on, endlessly, about how horrible it is that Obama wants to raise taxes during economic hard times.
The Democrats, as they have every single other time the Republicans threw a random temper tantrum, will rush to the "center" and agree, at the very least, to a greatly reduced estate tax, but more likely will simply end the estate tax on a permanent basis. We will then be told that without 70 votes in the Senate the Democrats are powerless to do anything....
posted by sotonohito at 10:02 AM on December 17, 2009 [35 favorites]
I say burry me with my riches, and let the IRS exhume me. I'd love to see those Nancy boy accountants get some dirt under their nails like REAL AMERICANS who have REAL JOBS. Unless it's the other archetypical IRS agent, the armed IRS thug with guns who attack me if I don't pay taxes, in which case I give them what they want but then deliver a 20 page rant on how Ayn Rand was totally right. I can do that, because... Yeah death! That's where I'm a zombie!
posted by mccarty.tim at 10:03 AM on December 17, 2009 [6 favorites]
posted by mccarty.tim at 10:03 AM on December 17, 2009 [6 favorites]
I would suspect that there will be a fair amount (okay maybe not fair, but a significant blip) in the death stats later this year. Grannie dies at home in bed on the 30th, there's really no reason anyone needs to know until the first, and find a friendly funereal home operator that'll sign the death certificate stating that she died in 2010.
posted by Keith Talent at 10:03 AM on December 17, 2009
posted by Keith Talent at 10:03 AM on December 17, 2009
Great. Charon had better start accepting credit cards, because I am not walking around that stupid river for a hundred years with a bunch of contemptible fools who didn't bother to save for the future.
posted by Copronymus at 10:04 AM on December 17, 2009 [4 favorites]
posted by Copronymus at 10:04 AM on December 17, 2009 [4 favorites]
Nice title.
posted by gottabefunky at 10:06 AM on December 17, 2009
posted by gottabefunky at 10:06 AM on December 17, 2009
a few questions:
so it's a one year only deal, which would be worthless to the people who care about this passionately, unless... what? the idea that this is a window for murdering relatives is absurd, at least in terms of why they passed this bill. so what's the thought process behind whoever lobbied for this? is it:
-a window of opportunity for some tax loophole to become even holierly looped? how so?
-a feint? are they only pretending that they'll put the tax back, but in actuality are preparing to make it permanent in a year's time in some way?
posted by shmegegge at 10:06 AM on December 17, 2009
so it's a one year only deal, which would be worthless to the people who care about this passionately, unless... what? the idea that this is a window for murdering relatives is absurd, at least in terms of why they passed this bill. so what's the thought process behind whoever lobbied for this? is it:
-a window of opportunity for some tax loophole to become even holierly looped? how so?
-a feint? are they only pretending that they'll put the tax back, but in actuality are preparing to make it permanent in a year's time in some way?
posted by shmegegge at 10:06 AM on December 17, 2009
If you want to fight the death tax, make some mock legislation. Add a death tax FOR DOGS, just like how one congressman made a mockery of healthcare by coming up with Medicare for pets.
Or come up with a Zombie Stimulus. If you come back to life, the government pays for your brains and stitches to reattach dismembered limbs. It cancels out the death tax.
posted by mccarty.tim at 10:08 AM on December 17, 2009
Or come up with a Zombie Stimulus. If you come back to life, the government pays for your brains and stitches to reattach dismembered limbs. It cancels out the death tax.
posted by mccarty.tim at 10:08 AM on December 17, 2009
An increased death rate of rich old people does not necessarily mean an uptick in the murder rate. Haven't studies shown that people can "hold on" until after some significant event (like christmas, a visit from kids, etc)?
posted by DU at 10:09 AM on December 17, 2009
posted by DU at 10:09 AM on December 17, 2009
I wonder what the Right to Lifers think of this? If I were an old man in a lot of pain with a slow, terminal disease, who had a lot of money to pass on to my needy family, I'd be tempted to take advantage of this through assisted suicide.
Come to think of it, if anything, they'd want a high death tax all the time, so that people wouldn't feel like they'd be less of a burden if they would die. Seems to me the pro-life stance here is to favor a high death tax and oppose inheritance.
Can't wait to hear Michelle Bachman and other Death Panellers propose that. It's simple incentives, so not going for it is an assault on the free market economics they so love.
posted by mccarty.tim at 10:11 AM on December 17, 2009
Come to think of it, if anything, they'd want a high death tax all the time, so that people wouldn't feel like they'd be less of a burden if they would die. Seems to me the pro-life stance here is to favor a high death tax and oppose inheritance.
Can't wait to hear Michelle Bachman and other Death Panellers propose that. It's simple incentives, so not going for it is an assault on the free market economics they so love.
posted by mccarty.tim at 10:11 AM on December 17, 2009
There shouldn't be a death tax. Dead people shouldn't have to pay tax. But people who receive money from dead people should pay tax. Because it is income.
posted by troybob at 10:12 AM on December 17, 2009 [40 favorites]
posted by troybob at 10:12 AM on December 17, 2009 [40 favorites]
so what's the thought process behind whoever lobbied for this?
In 2001 they passed the phase-out of the Estate Tax via "reconciliation" which by Senate rules must sunset after 10 years. The Republicans naturally assumed they'd be in control in 2009 to continue and extend the damage.
posted by tad at 10:14 AM on December 17, 2009 [1 favorite]
In 2001 they passed the phase-out of the Estate Tax via "reconciliation" which by Senate rules must sunset after 10 years. The Republicans naturally assumed they'd be in control in 2009 to continue and extend the damage.
posted by tad at 10:14 AM on December 17, 2009 [1 favorite]
I predict a revival of the smother party. (This is a rural English custom designed to eliminate aged and bedfast dependents. A family so afflicted throws a "smother party" where the guests pile mattresses on the old liability, climb up on top of the matresses and lush themselves out.)
posted by The Straightener at 10:15 AM on December 17, 2009 [8 favorites]
posted by The Straightener at 10:15 AM on December 17, 2009 [8 favorites]
But people who receive money from dead people should pay tax. Because it is income.
I find it odd that people naturally assume we must pay taxes on all received monies.
A gift is a gift. Wealth does not harm me, unless it engages in rentierism, which can be taxed quite effectively with direct taxes on it.
posted by tad at 10:16 AM on December 17, 2009 [1 favorite]
I find it odd that people naturally assume we must pay taxes on all received monies.
A gift is a gift. Wealth does not harm me, unless it engages in rentierism, which can be taxed quite effectively with direct taxes on it.
posted by tad at 10:16 AM on December 17, 2009 [1 favorite]
shmegegge: "-a feint? are they only pretending that they'll put the tax back, but in actuality are preparing to make it permanent in a year's time in some way?"
Pretty much. It (like most "sunset" legislation is designed to be replaced with a permanent version. As stated above, now Republicans can say "OH MY GOD an increase from 0 to 55% tax that's INSANE" and probably get shitheel Democrats to agree to some middle range.
posted by graventy at 10:20 AM on December 17, 2009 [1 favorite]
Pretty much. It (like most "sunset" legislation is designed to be replaced with a permanent version. As stated above, now Republicans can say "OH MY GOD an increase from 0 to 55% tax that's INSANE" and probably get shitheel Democrats to agree to some middle range.
posted by graventy at 10:20 AM on December 17, 2009 [1 favorite]
I think the real question isn't how many rich old people are purposely killed, but how many will be kept alive on life support past Jan 1? It could potentially be worth a lot of money to keep someone "legally alive" (braindead but on a vent) for a few extra days in the coming weeks.
The dirty business would be a year from now, but I suspect it will be less (or at least less obvious) than the quite-legal postponement of someone's demise in order to push them into the exempt period.
posted by Kadin2048 at 10:20 AM on December 17, 2009 [1 favorite]
The dirty business would be a year from now, but I suspect it will be less (or at least less obvious) than the quite-legal postponement of someone's demise in order to push them into the exempt period.
posted by Kadin2048 at 10:20 AM on December 17, 2009 [1 favorite]
I find it odd that people naturally assume we must pay taxes on all received monies.
I think people are just used to it. Whenever any money changes hands, the government tries to get a cut.
posted by milarepa at 10:21 AM on December 17, 2009
I think people are just used to it. Whenever any money changes hands, the government tries to get a cut.
posted by milarepa at 10:21 AM on December 17, 2009
How frigging backwards can a government get it?
Well, apparently backwards enough to eliminate a tax during a period when the government is going bankrupt. Brilliant!
posted by five fresh fish at 10:22 AM on December 17, 2009 [3 favorites]
Well, apparently backwards enough to eliminate a tax during a period when the government is going bankrupt. Brilliant!
posted by five fresh fish at 10:22 AM on December 17, 2009 [3 favorites]
“You’re messing with people’s end-of-life decisions,” said Grover Norquist, a Republican activist and head of Americans for Tax Reform, a longtime advocate for repealing the levy. ‘ This is cruel. This is cruel incompetence. This is watching the doctor fumble around.”
Ignoring for a second that this is Grover Norquist, who's pretty much intent on destroying the United States of America, how does an Estate Tax affect anyone's end-of-life decisions? The tax is levied on the estate, after a person is already dead. What they do before that is unaffected!
What always seemed strange to me about opposition to estate or inheritance taxes is how people approach it. They act as though it impinges on a person's ability to give to family. Once a person has died, however, they are no longer a person at all, and they have exactly zero rights. What the estate tax really does is affects a person's ability to inherit vast riches that they're entitled to only by luck of being born to a rich person.
It may seem natural that a person should be able to give unencumbered to their offspring, but from the other end, it's equally natural that no person should be entitled to wealth solely by luck of birthright. The estate tax seems like a pretty fair compromise: beyond a certain point, your offspring get half, and society gets half.
If I had my druthers, it'd be around a $1 million limit, and then 95%. Congratulations, your rich parents left you a substantial house and some spending money, and you didn't have to lift a finger. What're you complaining about?
posted by explosion at 10:22 AM on December 17, 2009 [10 favorites]
Ignoring for a second that this is Grover Norquist, who's pretty much intent on destroying the United States of America, how does an Estate Tax affect anyone's end-of-life decisions? The tax is levied on the estate, after a person is already dead. What they do before that is unaffected!
What always seemed strange to me about opposition to estate or inheritance taxes is how people approach it. They act as though it impinges on a person's ability to give to family. Once a person has died, however, they are no longer a person at all, and they have exactly zero rights. What the estate tax really does is affects a person's ability to inherit vast riches that they're entitled to only by luck of being born to a rich person.
It may seem natural that a person should be able to give unencumbered to their offspring, but from the other end, it's equally natural that no person should be entitled to wealth solely by luck of birthright. The estate tax seems like a pretty fair compromise: beyond a certain point, your offspring get half, and society gets half.
If I had my druthers, it'd be around a $1 million limit, and then 95%. Congratulations, your rich parents left you a substantial house and some spending money, and you didn't have to lift a finger. What're you complaining about?
posted by explosion at 10:22 AM on December 17, 2009 [10 favorites]
A gift is a gift.
is an inheritance a gift? how much of it qualifies as a gift? what if it appreciates in value, such that it could provide an above-poverty-level income simply from the value appreciation? by which I mean, what if I leave a business to my children (as in, not a corporation, a privately owned business.)? what if I leave a substantial enough fortune that the interest on it provides an annual income of 100k/year? etc...
I guess what I'm saying is, how far do you think we should take this "gift" idea? it seems awfully simplistic to me.
posted by shmegegge at 10:23 AM on December 17, 2009 [1 favorite]
is an inheritance a gift? how much of it qualifies as a gift? what if it appreciates in value, such that it could provide an above-poverty-level income simply from the value appreciation? by which I mean, what if I leave a business to my children (as in, not a corporation, a privately owned business.)? what if I leave a substantial enough fortune that the interest on it provides an annual income of 100k/year? etc...
I guess what I'm saying is, how far do you think we should take this "gift" idea? it seems awfully simplistic to me.
posted by shmegegge at 10:23 AM on December 17, 2009 [1 favorite]
so it's a one year only deal, which would be worthless to the people who care about this passionately, unless... what? the idea that this is a window for murdering relatives is absurd, at least in terms of why they passed this bill. so what's the thought process behind whoever lobbied for this? is it:
-a window of opportunity for some tax loophole to become even holierly looped? how so?
-a feint? are they only pretending that they'll put the tax back, but in actuality are preparing to make it permanent in a year's time in some way?
posted by shmegegge at 10:06 AM on December 17 [+] [!]
The hope with limited time legislation like this is always that they'll be able to keep extending it or make it permanent. Once it's been enacted for a while already, the threshold of resistance is lowered compared to other bills, and its easier to get your political opponents to give on this thing in exchange for something else. And in this case, it also allows for the tactics sotonohito described above. It would surprise me more if he weren't right than if he were.
posted by Caduceus at 10:25 AM on December 17, 2009
-a window of opportunity for some tax loophole to become even holierly looped? how so?
-a feint? are they only pretending that they'll put the tax back, but in actuality are preparing to make it permanent in a year's time in some way?
posted by shmegegge at 10:06 AM on December 17 [+] [!]
The hope with limited time legislation like this is always that they'll be able to keep extending it or make it permanent. Once it's been enacted for a while already, the threshold of resistance is lowered compared to other bills, and its easier to get your political opponents to give on this thing in exchange for something else. And in this case, it also allows for the tactics sotonohito described above. It would surprise me more if he weren't right than if he were.
posted by Caduceus at 10:25 AM on December 17, 2009
I'm guessing people will take a clue from Hotblack Desiato and just take a year off dead for tax purposes.
posted by The Bellman at 10:26 AM on December 17, 2009 [5 favorites]
posted by The Bellman at 10:26 AM on December 17, 2009 [5 favorites]
My guess is that there will be significant differences between years, but jeez, I hope crazy old money families don't start killing off their elders.
posted by mathowie at 9:57 AM on December 17
I do. If we're lucky it'll look like the end of Reservoir Dogs.
posted by Optimus Chyme at 10:27 AM on December 17, 2009 [7 favorites]
posted by mathowie at 9:57 AM on December 17
I do. If we're lucky it'll look like the end of Reservoir Dogs.
posted by Optimus Chyme at 10:27 AM on December 17, 2009 [7 favorites]
The reason we have an estate tax in the first place is because America because we fought a war to get ourselves away from hereditary aristocracy. If you let rich people give all their money to their kids, you end up with pretty much the same thing, and the people who built this country knew this. In America people are supposed to succeed or fail based on their own merits, not because daddy has a lot of cash. Not that it actually works that way, but the estate tax definitely helps keep incompetent people from continuously subsisting on their ancestor's income.
And it only kicks in once you get into the millionaire territory anyway, it's not like it's taking money that a family will really and truly need to get by.
posted by Zalzidrax at 10:29 AM on December 17, 2009 [15 favorites]
And it only kicks in once you get into the millionaire territory anyway, it's not like it's taking money that a family will really and truly need to get by.
posted by Zalzidrax at 10:29 AM on December 17, 2009 [15 favorites]
I think it's funny that the whole brand of evangelistic, fanatical, stalkerish patriotism conveniently avoids the concept that loving your country means paying your share, without complaint, to keep it going. It is as if there are people who think that, as individuals, they are such a precious gift to our nation that their mere presence merits an exception to the code.
posted by troybob at 10:32 AM on December 17, 2009 [16 favorites]
posted by troybob at 10:32 AM on December 17, 2009 [16 favorites]
how does an Estate Tax affect anyone's end-of-life decisions
Well, I'm spending a lot of my middle-of-life trying to figure out how to die with exactly one dollar to my name at the time of my death...does that count?
posted by WolfDaddy at 10:32 AM on December 17, 2009 [1 favorite]
Well, I'm spending a lot of my middle-of-life trying to figure out how to die with exactly one dollar to my name at the time of my death...does that count?
posted by WolfDaddy at 10:32 AM on December 17, 2009 [1 favorite]
Hmm, so bush was able to pass able to pass a controversial law via reconciliation?
posted by delmoi at 10:32 AM on December 17, 2009
posted by delmoi at 10:32 AM on December 17, 2009
You still often often hear the myth that small business owners and farmers are the ones that bear the brunt of the estate tax, but I think the general public is finally cluing in to the fact that it actually only affects the uber-wealthy.
Here's some coverage from an event I helped organize last month where Maine farmers came together to call for a higher estate tax.
posted by Vectorcon Systems at 10:35 AM on December 17, 2009 [1 favorite]
Here's some coverage from an event I helped organize last month where Maine farmers came together to call for a higher estate tax.
posted by Vectorcon Systems at 10:35 AM on December 17, 2009 [1 favorite]
Next year would seem to be the year to poison your rich old uncle with cyanide.
This year will see the first meeting of the Westboro Active Society for Supplanting Parents. They can do the dirty work, but they take a killer cut. Thankfully, it's a family business.
posted by The Whelk at 10:35 AM on December 17, 2009
This year will see the first meeting of the Westboro Active Society for Supplanting Parents. They can do the dirty work, but they take a killer cut. Thankfully, it's a family business.
posted by The Whelk at 10:35 AM on December 17, 2009
Is it time already to dig up this legendary AskMe thread?
posted by MuffinMan at 10:01 AM on December 17
If your goal is to collect Grampa's estate making his body vanish without a trace is going to be really, really counterproductive.
posted by nanojath at 10:35 AM on December 17, 2009 [3 favorites]
posted by MuffinMan at 10:01 AM on December 17
If your goal is to collect Grampa's estate making his body vanish without a trace is going to be really, really counterproductive.
posted by nanojath at 10:35 AM on December 17, 2009 [3 favorites]
How frigging backwards can a government get it?
Well, apparently backwards enough to eliminate a tax during a period when the government is going bankrupt. Brilliant!
That's hardly the current government's fault. It's a sunset law passed in 2001, by Bush et al, and it would be a pretty enormous can of worms to try and stop it preemptively, especially with all the other shit our Democratic party controlled congress is failing to achieve. Seriously, do you want to distract them from their failure with even more failure, especially when this one will go away after a year if the previously mentioned failure goes on long enough?
posted by Caduceus at 10:37 AM on December 17, 2009
Well, apparently backwards enough to eliminate a tax during a period when the government is going bankrupt. Brilliant!
That's hardly the current government's fault. It's a sunset law passed in 2001, by Bush et al, and it would be a pretty enormous can of worms to try and stop it preemptively, especially with all the other shit our Democratic party controlled congress is failing to achieve. Seriously, do you want to distract them from their failure with even more failure, especially when this one will go away after a year if the previously mentioned failure goes on long enough?
posted by Caduceus at 10:37 AM on December 17, 2009
"Will lots of old rich people die?"
God, I hope so. On a game show called, "Who wants to inherit some shit?" Competitors must overcome a series of challenges, and the one who finally succeeds in killing the rich person automatically inherits the whole shebang. Tax-free.
Speaking as someone who never expects to inherit anything from anyone, ever, I of course would like to see a 100% "can't take it with you" inheritance tax. No one should be able to give anything to their descendants other than life lessons. Probably a lot more people would spend time teaching and talking with their kids than working ridiculous hours and neglecting the kids and their moral and intellectual development.
Of course, the rich would find a way around it. Money always does. The only thing that beats money is more money. Which is why I like my game show idea. The ratings (and therefore ad revenue) would be HUGE.
posted by Eideteker at 10:39 AM on December 17, 2009 [3 favorites]
God, I hope so. On a game show called, "Who wants to inherit some shit?" Competitors must overcome a series of challenges, and the one who finally succeeds in killing the rich person automatically inherits the whole shebang. Tax-free.
Speaking as someone who never expects to inherit anything from anyone, ever, I of course would like to see a 100% "can't take it with you" inheritance tax. No one should be able to give anything to their descendants other than life lessons. Probably a lot more people would spend time teaching and talking with their kids than working ridiculous hours and neglecting the kids and their moral and intellectual development.
Of course, the rich would find a way around it. Money always does. The only thing that beats money is more money. Which is why I like my game show idea. The ratings (and therefore ad revenue) would be HUGE.
posted by Eideteker at 10:39 AM on December 17, 2009 [3 favorites]
Sorry, I got some sarcasm mixed in with my sarcasm in that last comment.
posted by Caduceus at 10:41 AM on December 17, 2009
posted by Caduceus at 10:41 AM on December 17, 2009
I think the Democrats could overturn it if they called it The Celebration of the End of Life and Love for God and Country tax.
posted by troybob at 10:44 AM on December 17, 2009 [2 favorites]
posted by troybob at 10:44 AM on December 17, 2009 [2 favorites]
explosion: "“It may seem natural that a person should be able to give unencumbered to their offspring, but from the other end, it's equally natural that no person should be entitled to wealth solely by luck of birthright. The estate tax seems like a pretty fair compromise: beyond a certain point, your offspring get half, and society gets half."
Especially if you are foolish enough to wait until you are dead to make these decisions. If you are rich enough to be affected by the estate tax, and also stupid enough not to have engaged in estate planning with a qualified financial advisor who can help you distribute your money in ways that work best for your family, without automatically losing it all to Uncle Sam,
...then you deserve to have that percentage taken by the government.
posted by pineapple at 10:45 AM on December 17, 2009 [1 favorite]
Especially if you are foolish enough to wait until you are dead to make these decisions. If you are rich enough to be affected by the estate tax, and also stupid enough not to have engaged in estate planning with a qualified financial advisor who can help you distribute your money in ways that work best for your family, without automatically losing it all to Uncle Sam,
...then you deserve to have that percentage taken by the government.
posted by pineapple at 10:45 AM on December 17, 2009 [1 favorite]
I guess what I'm saying is, how far do you think we should take this "gift" idea? it seems awfully simplistic to me.
If I were King I'd tax business income at some rate to pay for the services and general business infrastructure of the nation, but the bulk of my government's taxes would ... hopefully ... be borne by (commercial) landowners.
image from 100+ years ago, back when we were a smarter people. Or at least more naive.
posted by tad at 10:45 AM on December 17, 2009
If I were King I'd tax business income at some rate to pay for the services and general business infrastructure of the nation, but the bulk of my government's taxes would ... hopefully ... be borne by (commercial) landowners.
image from 100+ years ago, back when we were a smarter people. Or at least more naive.
posted by tad at 10:45 AM on December 17, 2009
The reason we have an estate tax in the first place is because America because we fought a war to get ourselves away from hereditary aristocracy.
SHHH! The plebes might be reading this!
posted by joe lisboa at 10:48 AM on December 17, 2009 [3 favorites]
SHHH! The plebes might be reading this!
posted by joe lisboa at 10:48 AM on December 17, 2009 [3 favorites]
I think it's funny that the whole brand of evangelistic, fanatical, stalkerish patriotism conveniently avoids the concept that loving your country means paying your share, without complaint, to keep it going. It is as if there are people who think that, as individuals, they are such a precious gift to our nation that their mere presence merits an exception to the code.
As evidenced by a number of backwards, anti-most-everyone laws and habits in the USA, Americans hate America. Or maybe it's America hates Americans. One way or the other, the USA is no longer (was it ever?) about pulling together as a country and giving everyone the best opportunity to succeed to their best ability.
The United States needs to unite to ensure their collective best interests are met. The bloody country exists because it wanted to get away from the regressive, oppressive regimes of old. Don't let the fuckers take it away!
Things will only change when the middle-class takes their power back.
posted by five fresh fish at 11:09 AM on December 17, 2009
As evidenced by a number of backwards, anti-most-everyone laws and habits in the USA, Americans hate America. Or maybe it's America hates Americans. One way or the other, the USA is no longer (was it ever?) about pulling together as a country and giving everyone the best opportunity to succeed to their best ability.
The United States needs to unite to ensure their collective best interests are met. The bloody country exists because it wanted to get away from the regressive, oppressive regimes of old. Don't let the fuckers take it away!
Things will only change when the middle-class takes their power back.
posted by five fresh fish at 11:09 AM on December 17, 2009
the whole brand of evangelistic, fanatical, stalkerish patriotism conveniently avoids the concept that loving your country means paying your share, without complaint, to keep it going.
Your statement assumes that people opposed to the estate tax are "evangelistic, fanatical, [and] stalkerish" - I am none of those - and ignores that the property making up the estate is generally "after tax" (i.e. it is money for which the decedent has already paid his or her share.)
It also assumes that every dollar collected by the federal government is used "to keep the country going." While debate about the need for $700 billion of TARP or $150-720 million (depending on who is counting) per day in Iraq is for another post, it is unreasonable to think that we need an estate tax to cover the necessary costs of keeping the country going. Characterizing disagreement with tax policy or government spending as unpatriotic behavior is not unlike the Republicans' silly argument that opposition to the War on Terror or its encroachment on civil liberties is unpatriotic.
Getting into the range of estate tax is not as hard as you might assume. The gross estate of a decedent is not just the vault of gold or the piles of money that a rich guy has amassed - it includes (among several other categories) the real property he or she owns, life insurance proceeds, and transfers of property that took place in the 3 years before death. Just house value and life insurance could get near $1 million.
Proactive defense: I proudly voted for Barack Obama for president, and loudly cheered the resounding defeat of the Republican party in 2008. My dad is a truck driver and my mother in-law is a retired schoolteacher. Nobody in my family is likely to ever pay an estate tax. I just think it is unfair that the government wants half of the money you earned before you may give it to your family.
posted by AgentRocket at 11:18 AM on December 17, 2009 [2 favorites]
Your statement assumes that people opposed to the estate tax are "evangelistic, fanatical, [and] stalkerish" - I am none of those - and ignores that the property making up the estate is generally "after tax" (i.e. it is money for which the decedent has already paid his or her share.)
It also assumes that every dollar collected by the federal government is used "to keep the country going." While debate about the need for $700 billion of TARP or $150-720 million (depending on who is counting) per day in Iraq is for another post, it is unreasonable to think that we need an estate tax to cover the necessary costs of keeping the country going. Characterizing disagreement with tax policy or government spending as unpatriotic behavior is not unlike the Republicans' silly argument that opposition to the War on Terror or its encroachment on civil liberties is unpatriotic.
Getting into the range of estate tax is not as hard as you might assume. The gross estate of a decedent is not just the vault of gold or the piles of money that a rich guy has amassed - it includes (among several other categories) the real property he or she owns, life insurance proceeds, and transfers of property that took place in the 3 years before death. Just house value and life insurance could get near $1 million.
Proactive defense: I proudly voted for Barack Obama for president, and loudly cheered the resounding defeat of the Republican party in 2008. My dad is a truck driver and my mother in-law is a retired schoolteacher. Nobody in my family is likely to ever pay an estate tax. I just think it is unfair that the government wants half of the money you earned before you may give it to your family.
posted by AgentRocket at 11:18 AM on December 17, 2009 [2 favorites]
I like the assumption how all people with the amount of wealth to be affected by the estate tax are automatically assumed to be either uber-wealthy, undeserving, or both.
Hi, I'm WolfDaddy, and I'm going to be affected by the estate tax. Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own to endow a foundation to help decrease the death rate of queer (and American!) kids rather than have any of it go to funding another war, or bailout, or to correct some hugely expensive blunder made in the name of greed and/or political expedience.
posted by WolfDaddy at 11:19 AM on December 17, 2009 [3 favorites]
Hi, I'm WolfDaddy, and I'm going to be affected by the estate tax. Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own to endow a foundation to help decrease the death rate of queer (and American!) kids rather than have any of it go to funding another war, or bailout, or to correct some hugely expensive blunder made in the name of greed and/or political expedience.
posted by WolfDaddy at 11:19 AM on December 17, 2009 [3 favorites]
Is it time already to dig up this legendary AskMe thread?
No, you'd be doing it wrong then. What you want is to make death look natural or accidental, along with the will giving you all the goods (or enough that it doesn't look fishy). A disappearing body means that the person could have just wandered off, and that doesn't always mean you'll get the goods. I foresee an uptick in the purchase of murder mystery novels and DVDs.
posted by filthy light thief at 11:19 AM on December 17, 2009
No, you'd be doing it wrong then. What you want is to make death look natural or accidental, along with the will giving you all the goods (or enough that it doesn't look fishy). A disappearing body means that the person could have just wandered off, and that doesn't always mean you'll get the goods. I foresee an uptick in the purchase of murder mystery novels and DVDs.
posted by filthy light thief at 11:19 AM on December 17, 2009
I find it odd that people naturally assume we must pay taxes on all received monies.
A gift is a gift.
An Olive Garden gift certificate is a gift. A fruitcake is a gift. Money in excess of $3.5 million that's only passing hands because the person who earned it is dead is not a gift. It's complete unearned freedom from work for you and -- if you're smart with your money and don't have too many kids -- your family for all of your lives.
I'm a conservative who has no problem with the "death tax", which only affects some of the least productive members of our society: children of the super-wealthy.
posted by coolguymichael at 11:19 AM on December 17, 2009 [6 favorites]
A gift is a gift.
An Olive Garden gift certificate is a gift. A fruitcake is a gift. Money in excess of $3.5 million that's only passing hands because the person who earned it is dead is not a gift. It's complete unearned freedom from work for you and -- if you're smart with your money and don't have too many kids -- your family for all of your lives.
I'm a conservative who has no problem with the "death tax", which only affects some of the least productive members of our society: children of the super-wealthy.
posted by coolguymichael at 11:19 AM on December 17, 2009 [6 favorites]
You know what's actually going to happen next year? It's not going to be a significant spike of deaths/homicides among the uber-wealthy. What's going to happen is that charitable giving will plummet, since without the spur of taxation there's no longer any purely self-interested reason for the people with real money to give.
posted by You Can't Tip a Buick at 11:19 AM on December 17, 2009 [2 favorites]
posted by You Can't Tip a Buick at 11:19 AM on December 17, 2009 [2 favorites]
Don't rich people get around these estate taxes by using trust funds (or somesuch) for their children? It seems there must be some way for them to at least reduce the tax hit to the equivalent of the children's personal income tax or a long term capital gains tax.
Am I wrong? It seems hard to believe that such a high estate tax would even exist given the influence of money in politics unless there was a simple way for the rich to avoid the tax.
posted by jsonic at 11:19 AM on December 17, 2009
Am I wrong? It seems hard to believe that such a high estate tax would even exist given the influence of money in politics unless there was a simple way for the rich to avoid the tax.
posted by jsonic at 11:19 AM on December 17, 2009
As mentioned before, the whole (totally patriotic Amurican, BTW) idea behind the estate tax is our disdain for aristocratic succession. The first estate tax was instituted in 1797 - hardly the brainchild of liberals and communists, no matter what Grover Norquist has to say.
Some quotes by people who are all huge supporters of freedom and the American economic system:
“An overgrown estate is a luxury at all times, and as such is the proper object of taxation.” - Thomas Paine
“It was estate law that made equality take its last step.” - Alexis de Toqueville
“Great sums bequeathed often work more for the injury than the good of the recipients.” -Andrew Carnegie
“Inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.” -Theodore Roosevelt
“The idea that you get a lifetime of privately funded food stamps based on coming out of the right womb strikes at my idea of fairness.” -Warren Buffett
"From the days of our founding fathers, the concept of equality of opportunity and dispersion of wealth and economic power has been part of the American psyche.The inheritance of huge fortunes, far beyond any reasonable need for education, for medical care and for a comfortable -- even luxurious -- standard of living has never rested easily with that political philosophy." -Paul Volcker
The problem here- and with health care, etc. - is that the questions have been successfully reframed as questions of "freedom". The questions have been framed by people who ONLY care about themselves. These are not questions about freedom; they are questions about whether or not we want a sustainable, successful, equitable, open society.
posted by Benny Andajetz at 11:25 AM on December 17, 2009 [15 favorites]
Some quotes by people who are all huge supporters of freedom and the American economic system:
“An overgrown estate is a luxury at all times, and as such is the proper object of taxation.” - Thomas Paine
“It was estate law that made equality take its last step.” - Alexis de Toqueville
“Great sums bequeathed often work more for the injury than the good of the recipients.” -Andrew Carnegie
“Inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.” -Theodore Roosevelt
“The idea that you get a lifetime of privately funded food stamps based on coming out of the right womb strikes at my idea of fairness.” -Warren Buffett
"From the days of our founding fathers, the concept of equality of opportunity and dispersion of wealth and economic power has been part of the American psyche.The inheritance of huge fortunes, far beyond any reasonable need for education, for medical care and for a comfortable -- even luxurious -- standard of living has never rested easily with that political philosophy." -Paul Volcker
The problem here- and with health care, etc. - is that the questions have been successfully reframed as questions of "freedom". The questions have been framed by people who ONLY care about themselves. These are not questions about freedom; they are questions about whether or not we want a sustainable, successful, equitable, open society.
posted by Benny Andajetz at 11:25 AM on December 17, 2009 [15 favorites]
Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own...
This is the right-wing cry of "I earned this on my own so let me keep it!". Was any of this wealth you claim was earned purely by "toil" aided by public institutions or infrastructure? Public education? Transportation/roads/utilities? Security/fire/policing?
Everyone's wealth is a product of shared public resources, and you get to benefit from it personally for your entire life. After that, it's time to give back to the system that helped create it.
posted by rocket88 at 11:32 AM on December 17, 2009 [2 favorites]
This is the right-wing cry of "I earned this on my own so let me keep it!". Was any of this wealth you claim was earned purely by "toil" aided by public institutions or infrastructure? Public education? Transportation/roads/utilities? Security/fire/policing?
Everyone's wealth is a product of shared public resources, and you get to benefit from it personally for your entire life. After that, it's time to give back to the system that helped create it.
posted by rocket88 at 11:32 AM on December 17, 2009 [2 favorites]
Especially if you are foolish enough to wait until you are dead to make these decisions. If you are rich enough to be affected by the estate tax, and also stupid enough not to have engaged in estate planning with a qualified financial advisor who can help you distribute your money in ways that work best for your family, without automatically losing it all to Uncle Sam
Yes, this. Estate planning and trusts will keep most of these folks away from the estate tax regardless. (WolfDaddy, you too can engage in financial planning!)
posted by miss tea at 11:33 AM on December 17, 2009
Yes, this. Estate planning and trusts will keep most of these folks away from the estate tax regardless. (WolfDaddy, you too can engage in financial planning!)
posted by miss tea at 11:33 AM on December 17, 2009
...ignores that the property making up the estate is generally "after tax" (i.e. it is money for which the decedent has already paid his or her share.)
All money and property you get is "after tax" in terms of the transaction the precedes it. The transfer of property is taxed, not the property itself.
posted by troybob at 11:34 AM on December 17, 2009 [1 favorite]
All money and property you get is "after tax" in terms of the transaction the precedes it. The transfer of property is taxed, not the property itself.
posted by troybob at 11:34 AM on December 17, 2009 [1 favorite]
I predict a revival of the smother party. (This is a rural English custom designed to eliminate aged and bedfast dependents. A family so afflicted throws a "smother party" where the guests pile mattresses on the old liability, climb up on top of the matresses and lush themselves out.)
The Jumping Party.
posted by Blazecock Pileon at 11:37 AM on December 17, 2009
The Jumping Party.
posted by Blazecock Pileon at 11:37 AM on December 17, 2009
Hi, I'm WolfDaddy, and I'm going to be affected by the estate tax. Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own to endow a foundation to help decrease the death rate of queer (and American!) kids rather than have any of it go to funding another war, or bailout, or to correct some hugely expensive blunder made in the name of greed and/or political expedience.
posted by WolfDaddy at 11:19 AM on December 17
How long would it take for a tax lawyer to figure out how to set up a non-profit organization using the funds your ancestors toiled for? One microsecond? I think you're bullshitting us, frankly.
posted by Optimus Chyme at 11:38 AM on December 17, 2009 [1 favorite]
posted by WolfDaddy at 11:19 AM on December 17
How long would it take for a tax lawyer to figure out how to set up a non-profit organization using the funds your ancestors toiled for? One microsecond? I think you're bullshitting us, frankly.
posted by Optimus Chyme at 11:38 AM on December 17, 2009 [1 favorite]
I like the assumption how all people with the amount of wealth to be affected by the estate tax are automatically assumed to be either uber-wealthy, undeserving, or both.
That's because it's completely true.
You're affected by the estate tax. That means that either:
(1) You expect to leave an estate well into the millions of dollars, in which case you are uber-wealthy.
or
(2) You have a relative with an estate well into the millions of dollars, in which case that relative is uber-wealthy and you're a member of an uber-wealthy family.
posted by ROU_Xenophobe at 11:38 AM on December 17, 2009 [5 favorites]
That's because it's completely true.
You're affected by the estate tax. That means that either:
(1) You expect to leave an estate well into the millions of dollars, in which case you are uber-wealthy.
or
(2) You have a relative with an estate well into the millions of dollars, in which case that relative is uber-wealthy and you're a member of an uber-wealthy family.
posted by ROU_Xenophobe at 11:38 AM on December 17, 2009 [5 favorites]
Another twist to this is that under rules passed by Congress in 2001, heirs will be subject to new capital gains taxes when the estate tax expires in 2010. These new taxes will affect many small farms and family businesses that were not affected by the estate tax, and they will be worse off than they would be under an estate tax extension. Whereas only the wealthiest of the wealthy could benefit from estate tax repeal because they were the only ones subject to the tax in the first place.
posted by ekroh at 11:40 AM on December 17, 2009
posted by ekroh at 11:40 AM on December 17, 2009
An Olive Garden gift certificate is a gift.
Is it too late to back out of the gift exchange?
posted by joe lisboa at 11:41 AM on December 17, 2009 [2 favorites]
Is it too late to back out of the gift exchange?
posted by joe lisboa at 11:41 AM on December 17, 2009 [2 favorites]
Hi, I'm WolfDaddy, and I'm going to be affected by the estate tax. Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own to endow a foundation to help decrease the death rate of queer (and American!) kids rather than have any of it go to funding another war, or bailout, or to correct some hugely expensive blunder made in the name of greed and/or political expedience.
PLAN AHEAD
posted by graventy at 11:50 AM on December 17, 2009
PLAN AHEAD
posted by graventy at 11:50 AM on December 17, 2009
AgentRocket: "I just think it is unfair that the government wants half of the money you earned before you may give it to your family."
They don't. Give it to your family now. There is a certain sum ($10K or $20K, can't remember which) that any single individual can give to any single other individual as a gift annually, before it will be taxed. Or set it up in trusts. Or start a foundation. Or invest in property. Find ways to use the money wisely before your death, and you will have all the say you want in how your family receives their inheritance.
WolfDaddy: "Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own to endow a foundation to help decrease the death rate of queer (and American!) kids rather than have any of it go to funding another war, or bailout, or to correct some hugely expensive blunder made in the name of greed and/or political expedience."
Again, what the estate tax will be used for, or how anyone could better use the money if left in his/her own pocket, are red herrings in this context. We might as well start a whole 'nother thread about the TARP or Bush or Afghanistan or Iraq. Where and how the dollars are spent is fairly moot.
The problem I have with any variation on the anti-estate tax argument of "my granddaddy worked hard to earn this money and was already taxed once on it and therefore I should get it free and clear" goes like this:
Your granddaddy got some income, however he came by it, and he did pay tax on it. And over his lifetime, he benefited from the payment of those taxes, via schools, roads, infrastructure, defense, Social Security, Medicare, and a host of other niceties that one's life is afforded by paying into the system. So your granddaddy and the government are clear now. Paid in full, so to speak. Each party has kept up their end of the deal.
Then you receive a big lump sum of cash that is now income to you. And you haven't paid any taxes on it—and yet you are receiving the schools, roads, infrastructure, defense, Social Security, Medicare, and a host of other niceties that one's life is afforded by paying into the system.
Why don't you have to pay taxes on your income, again? Is it because someone else owned the money before you? That's like arguing that you shouldn't have to pay taxes on your salary because your employer had to pay sales tax on the money when he received payment from the company's customers. What?
That you happen to be connected by blood to the person who owned the wealth before you doesn't exempt you from your responsibility. It might not feel very good... but it's not truly an issue of double taxation as people claim.
FWIW, my family has had to deal with the estate tax (and no, not millionaires). There is a common and unspoken theory that anyone who is pro-estate tax has clearly just never had to deal with it, and I have, and when the IRS takes that bite, it sucks. But so do cramps, fire ants, and apostrophe abuse. I accept those as facts of life and move on.
posted by pineapple at 11:54 AM on December 17, 2009 [18 favorites]
They don't. Give it to your family now. There is a certain sum ($10K or $20K, can't remember which) that any single individual can give to any single other individual as a gift annually, before it will be taxed. Or set it up in trusts. Or start a foundation. Or invest in property. Find ways to use the money wisely before your death, and you will have all the say you want in how your family receives their inheritance.
WolfDaddy: "Please forgive me if I'd like what's filtered down to me from four generations of my ancestors toil and what I've managed to build on my own to endow a foundation to help decrease the death rate of queer (and American!) kids rather than have any of it go to funding another war, or bailout, or to correct some hugely expensive blunder made in the name of greed and/or political expedience."
Again, what the estate tax will be used for, or how anyone could better use the money if left in his/her own pocket, are red herrings in this context. We might as well start a whole 'nother thread about the TARP or Bush or Afghanistan or Iraq. Where and how the dollars are spent is fairly moot.
The problem I have with any variation on the anti-estate tax argument of "my granddaddy worked hard to earn this money and was already taxed once on it and therefore I should get it free and clear" goes like this:
Your granddaddy got some income, however he came by it, and he did pay tax on it. And over his lifetime, he benefited from the payment of those taxes, via schools, roads, infrastructure, defense, Social Security, Medicare, and a host of other niceties that one's life is afforded by paying into the system. So your granddaddy and the government are clear now. Paid in full, so to speak. Each party has kept up their end of the deal.
Then you receive a big lump sum of cash that is now income to you. And you haven't paid any taxes on it—and yet you are receiving the schools, roads, infrastructure, defense, Social Security, Medicare, and a host of other niceties that one's life is afforded by paying into the system.
Why don't you have to pay taxes on your income, again? Is it because someone else owned the money before you? That's like arguing that you shouldn't have to pay taxes on your salary because your employer had to pay sales tax on the money when he received payment from the company's customers. What?
That you happen to be connected by blood to the person who owned the wealth before you doesn't exempt you from your responsibility. It might not feel very good... but it's not truly an issue of double taxation as people claim.
FWIW, my family has had to deal with the estate tax (and no, not millionaires). There is a common and unspoken theory that anyone who is pro-estate tax has clearly just never had to deal with it, and I have, and when the IRS takes that bite, it sucks. But so do cramps, fire ants, and apostrophe abuse. I accept those as facts of life and move on.
posted by pineapple at 11:54 AM on December 17, 2009 [18 favorites]
WolfDaddy- money you give to a charitable foundation is not taxed. You get that, right?
like any other gift
Any other gift is taxed after the first $10,000 in the U.S. One of the first things people with smaller estates do is give $10K a year to each kid, which is tax free.
posted by msalt at 11:58 AM on December 17, 2009 [1 favorite]
like any other gift
Any other gift is taxed after the first $10,000 in the U.S. One of the first things people with smaller estates do is give $10K a year to each kid, which is tax free.
posted by msalt at 11:58 AM on December 17, 2009 [1 favorite]
I'm a conservative who has no problem with the "death tax", which only affects some of the least productive members of our society: children of the super-wealthy.
I look at wealth with a finer granularity. As long as the super-wealthy are piddling their money away on consumption, more power to them (even though there is something of a broken-window fallacy here that troubles me occasionally).
If they are employing their inheritance by supporting industry through capital investment, then great!
If they are engaged in rentierism -- profiting from owning land and natural resources, then I'd like to see their business model broken with punitive taxation.
The great bulk of inherited wealth is involved in the third category, AFAICT, and should carry a far higher tax burden, not just on the event of inheritance but every day of its existence.
posted by tad at 12:01 PM on December 17, 2009
I look at wealth with a finer granularity. As long as the super-wealthy are piddling their money away on consumption, more power to them (even though there is something of a broken-window fallacy here that troubles me occasionally).
If they are employing their inheritance by supporting industry through capital investment, then great!
If they are engaged in rentierism -- profiting from owning land and natural resources, then I'd like to see their business model broken with punitive taxation.
The great bulk of inherited wealth is involved in the third category, AFAICT, and should carry a far higher tax burden, not just on the event of inheritance but every day of its existence.
posted by tad at 12:01 PM on December 17, 2009
SuperFreakonomics had a section about just this subject. Research seems to indicate that older people who are receiving annuities tend to live longer because the money comes in a steady flow, rather than all at once. It also touched on the fact that old people whose children visit them tend to live longer. The motives of these kids isn't found to be altruistic, as evidenced by the much lower frequency of nursing homes visits by only kids vs. kids with siblings. It seems that if there's other competition for granny's scratch, the kids will visit in an effort to ingratiate themselves.
So, I guess granny and gramps are going to be missing those visits in 2010, while their kids hope for their swift demise.
posted by reenum at 12:01 PM on December 17, 2009
So, I guess granny and gramps are going to be missing those visits in 2010, while their kids hope for their swift demise.
posted by reenum at 12:01 PM on December 17, 2009
give $10K a year to each kid, which is tax free.
$13k and/or the lifetime limit. All this tax BS is just full-employment for tax accountants, a particularly useless societal parasite.
Tax land. No evasion possible. :)
posted by tad at 12:04 PM on December 17, 2009
$13k and/or the lifetime limit. All this tax BS is just full-employment for tax accountants, a particularly useless societal parasite.
Tax land. No evasion possible. :)
posted by tad at 12:04 PM on December 17, 2009
I just think it is unfair that the government wants half of the money you earned before you may give it to your family
To be clear: the tax is not imposed before you give the to your family. It's taxed after you give it, and the recipient pays the tax. It is a tax on income, not on savings. It's a simple distinction, but it makes a big difference in framing the issue.
posted by schoolgirl report at 12:05 PM on December 17, 2009
To be clear: the tax is not imposed before you give the to your family. It's taxed after you give it, and the recipient pays the tax. It is a tax on income, not on savings. It's a simple distinction, but it makes a big difference in framing the issue.
posted by schoolgirl report at 12:05 PM on December 17, 2009
I would ask what the lifetime limit is, but I'm afraid it would be $20, same as in town.
posted by msalt at 12:06 PM on December 17, 2009 [1 favorite]
posted by msalt at 12:06 PM on December 17, 2009 [1 favorite]
It's taxed after you give it, and the recipient pays the tax. It is a tax on income, not on savings.
I've read this here and on other sites over the years, and AFAICT this is wrong. The Estate Tax is in fact a tax on the estate itself and is paid by the executor of the estate.
posted by tad at 12:11 PM on December 17, 2009
I've read this here and on other sites over the years, and AFAICT this is wrong. The Estate Tax is in fact a tax on the estate itself and is paid by the executor of the estate.
posted by tad at 12:11 PM on December 17, 2009
tad, you are correct that the executor pays the estate tax. I don't believe that changes the meat of the argument; it's going to be income to someone, somewhere. Some entity is going to receive that money, whether it's grandchildren, or cats, or the local Elks Club.
Personally, that the estate's executor is the mechanism by which the taxes are paid doesn't affect my perspective. You can't take it with you, and if you elect not to spend or disburse it before you die, it's going to get taxed.
posted by pineapple at 12:27 PM on December 17, 2009
Personally, that the estate's executor is the mechanism by which the taxes are paid doesn't affect my perspective. You can't take it with you, and if you elect not to spend or disburse it before you die, it's going to get taxed.
posted by pineapple at 12:27 PM on December 17, 2009
I've read this here and on other sites over the years, and AFAICT this is wrong. The Estate Tax is in fact a tax on the estate itself and is paid by the executor of the estate.
according to wikipedia:
according to wikipedia:
The estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will or according to the state laws of intestacy. The estate tax is one part of the Unified Gift and Estate Tax system in the United States. The other part of the system, the gift tax, imposes a tax on transfers of property during a person's life; the gift tax prevents avoidance of the estate tax should a person want to give away his/her estate.posted by shmegegge at 12:28 PM on December 17, 2009
Thing is, it's such an onerous and destructive tax that everyone has to arrange their affairs to avoid it.
The Estate Tax is addressing symptoms, not the root causes of economic injustice.
posted by tad at 12:37 PM on December 17, 2009
The Estate Tax is addressing symptoms, not the root causes of economic injustice.
posted by tad at 12:37 PM on December 17, 2009
"Onerous and destructive" are pretty strong words to apply to a percentage given to the government out of a big chunk of cash that no longer has an owner.
Frankly, I'm surprised you even bother calling it the estate tax and not just going straight for the more inflammatory "death tax".
posted by pineapple at 12:40 PM on December 17, 2009
Frankly, I'm surprised you even bother calling it the estate tax and not just going straight for the more inflammatory "death tax".
posted by pineapple at 12:40 PM on December 17, 2009
Can we pass real healtcare reform with a public option via reconciliation?
please
posted by msbutah at 12:44 PM on December 17, 2009
please
posted by msbutah at 12:44 PM on December 17, 2009
If it were a tax on cash then it wouldn't be destructive. But total asset value, stocks and stuff make it horribly complicated.
If the Estate is throwing off income, taxes on that will continue.
I went to a tax-avoidance/Medicare seminar hosted by KGO's Len Tillem a couple of months back and I admit this is coloring my perspective. Len's partner in crime, a Palo Alto tax attorney, was quite proud of the AB asset trust dealybob he had developed in hiding assets from the tax man (link).
I can't stand the US's current GINI and think the Bush tax cuts may prove to have torpedoed the future wealth and position of the Union as bad as the Axis powers' decisions in 1941 to go to total war was to their respective national weals.
But the Estate Tax is just kinda dumb. There are more effective regimes out there.
posted by tad at 12:54 PM on December 17, 2009
If the Estate is throwing off income, taxes on that will continue.
I went to a tax-avoidance/Medicare seminar hosted by KGO's Len Tillem a couple of months back and I admit this is coloring my perspective. Len's partner in crime, a Palo Alto tax attorney, was quite proud of the AB asset trust dealybob he had developed in hiding assets from the tax man (link).
I can't stand the US's current GINI and think the Bush tax cuts may prove to have torpedoed the future wealth and position of the Union as bad as the Axis powers' decisions in 1941 to go to total war was to their respective national weals.
But the Estate Tax is just kinda dumb. There are more effective regimes out there.
posted by tad at 12:54 PM on December 17, 2009
The problem is that for all they talk about balancing the budget, conservatives aren't proposing a replacement tax, and they lost their shit over even the idea of a war tax.
posted by mccarty.tim at 1:20 PM on December 17, 2009
posted by mccarty.tim at 1:20 PM on December 17, 2009
tad, you're just kinda shifting what your problem with the tax is as the conversation moves along. I'm having difficulty pinning down the basis of your objections beyond "I don't like it."
posted by shmegegge at 1:26 PM on December 17, 2009
posted by shmegegge at 1:26 PM on December 17, 2009
I'm having difficulty pinning down the basis of your objections beyond "I don't like it."
Like I said above, I lean towards taxing (commercial) land more and capital less.
There's so much financial engineering involved in avoiding taxes like this, and estates that do get hit by it generally have to rejigger things to pay the near-confiscatory tax rate.
Even avoiding the LVT stuff for now, I think it's just more efficient to tax actual income streams rather than asset values.
I am arguing abstracts here, what should be rather than what can be.
posted by tad at 1:47 PM on December 17, 2009
Like I said above, I lean towards taxing (commercial) land more and capital less.
There's so much financial engineering involved in avoiding taxes like this, and estates that do get hit by it generally have to rejigger things to pay the near-confiscatory tax rate.
Even avoiding the LVT stuff for now, I think it's just more efficient to tax actual income streams rather than asset values.
I am arguing abstracts here, what should be rather than what can be.
posted by tad at 1:47 PM on December 17, 2009
Oh, good grief. If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
posted by WolfDaddy at 2:17 PM on December 17, 2009
posted by WolfDaddy at 2:17 PM on December 17, 2009
Oh, good grief. If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
Considering that it would take me 125 years to make that amount on my current salary*, yes, I do think that's a substantial amount.
*admittedly, pre-tax.
posted by dinty_moore at 2:22 PM on December 17, 2009 [3 favorites]
Considering that it would take me 125 years to make that amount on my current salary*, yes, I do think that's a substantial amount.
*admittedly, pre-tax.
posted by dinty_moore at 2:22 PM on December 17, 2009 [3 favorites]
If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
I guess you don't have anything to contest with me, then, man. The interest you earn on that money in a year (assuming a 4% interest rate, compounded monthly) would be three times what I earn before taxes every year. Yes, you're wealthy or the side of your family that wealth is on is. Wealthy enough that an estate tax is reasonable when that money is inherited.
posted by shmegegge at 2:42 PM on December 17, 2009 [7 favorites]
I guess you don't have anything to contest with me, then, man. The interest you earn on that money in a year (assuming a 4% interest rate, compounded monthly) would be three times what I earn before taxes every year. Yes, you're wealthy or the side of your family that wealth is on is. Wealthy enough that an estate tax is reasonable when that money is inherited.
posted by shmegegge at 2:42 PM on December 17, 2009 [7 favorites]
Yes, if you can live indefinitely off of interest alone, you are a fatcat.
posted by mek at 3:32 PM on December 17, 2009 [6 favorites]
posted by mek at 3:32 PM on December 17, 2009 [6 favorites]
If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
No comment on uber-wealthy, but with a $3.5 million exclusion, almost all of that money will go to you tax-free. It is only the amount above that level that is taxed. The first $3.5 million is completely free. So in your case the estate tax will be almost zero.
posted by JackFlash at 3:50 PM on December 17, 2009
No comment on uber-wealthy, but with a $3.5 million exclusion, almost all of that money will go to you tax-free. It is only the amount above that level that is taxed. The first $3.5 million is completely free. So in your case the estate tax will be almost zero.
posted by JackFlash at 3:50 PM on December 17, 2009
3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations
It doesn't matter whether that money was saved up over years and generations, earned in one profitable career or came as a single lottery windfall. You are trying to argue that because your ancestors had a bunch of money, you should be entitled to a bunch of money. Whereas other people who weren't fortunate enough to have rich ancestors don't deserve a bunch of money.
Effectively, this attitude inherently implies that the already rich are more deserving. Not only did they enjoy the use of a larger house, better education, and other luxuries, but when their parents die, they get up to 3.5 million dollars of assets tax-free!
Sorry to burst your bubble, but society believes that a man is entitled to the fruits of his labor, not the fruits of his father's. A son has done nothing to deserve inheriting his father's riches, and benefits from them throughout his childhood all the same.
posted by explosion at 3:53 PM on December 17, 2009 [2 favorites]
It doesn't matter whether that money was saved up over years and generations, earned in one profitable career or came as a single lottery windfall. You are trying to argue that because your ancestors had a bunch of money, you should be entitled to a bunch of money. Whereas other people who weren't fortunate enough to have rich ancestors don't deserve a bunch of money.
Effectively, this attitude inherently implies that the already rich are more deserving. Not only did they enjoy the use of a larger house, better education, and other luxuries, but when their parents die, they get up to 3.5 million dollars of assets tax-free!
Sorry to burst your bubble, but society believes that a man is entitled to the fruits of his labor, not the fruits of his father's. A son has done nothing to deserve inheriting his father's riches, and benefits from them throughout his childhood all the same.
posted by explosion at 3:53 PM on December 17, 2009 [2 favorites]
just a little more than 3 and a half million dollars
That is more money than most of us will see in our entire lifetimes. Your idea of what constitutes a large amount of money has been distorted by your wealth.
accumulated over 100 years
What does this even mean?
posted by Pope Guilty at 3:59 PM on December 17, 2009 [1 favorite]
That is more money than most of us will see in our entire lifetimes. Your idea of what constitutes a large amount of money has been distorted by your wealth.
accumulated over 100 years
What does this even mean?
posted by Pope Guilty at 3:59 PM on December 17, 2009 [1 favorite]
If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
If you have 3 1/2 million dollars, you are uber-wealthy. This is, frankly, definitional.
It doesn't matter whether you gathered that 3 1/2 million dollars in eighteen minutes or over 100 years or whether your family had been slowly accumulating it since they were unicellular. Wealth is a stock, not a flow.
You might live "normally" and frugally and have 3 1/2 million dollars. Then you are an uber-wealthy person who lives normally, not a not-uber-wealthy person. Wealth doesn't describe behavior, it describes money and monetizable assets.
You might not feel uber-wealthy with 3 1/2 million dollars, because there are still plenty of houses or other things you can't afford. That doesn't make you not-uber-wealthy, that just means that some people are even richer than you. Wealth doesn't describe your feelings, only your assets.
You might not feel, in lots of ways, like the silly descriptor "uber-wealthy" is right for you. Doesn't matter. Those 3 1/2 million dollars mean that it does.
posted by ROU_Xenophobe at 4:04 PM on December 17, 2009 [1 favorite]
If you have 3 1/2 million dollars, you are uber-wealthy. This is, frankly, definitional.
It doesn't matter whether you gathered that 3 1/2 million dollars in eighteen minutes or over 100 years or whether your family had been slowly accumulating it since they were unicellular. Wealth is a stock, not a flow.
You might live "normally" and frugally and have 3 1/2 million dollars. Then you are an uber-wealthy person who lives normally, not a not-uber-wealthy person. Wealth doesn't describe behavior, it describes money and monetizable assets.
You might not feel uber-wealthy with 3 1/2 million dollars, because there are still plenty of houses or other things you can't afford. That doesn't make you not-uber-wealthy, that just means that some people are even richer than you. Wealth doesn't describe your feelings, only your assets.
You might not feel, in lots of ways, like the silly descriptor "uber-wealthy" is right for you. Doesn't matter. Those 3 1/2 million dollars mean that it does.
posted by ROU_Xenophobe at 4:04 PM on December 17, 2009 [1 favorite]
Oh, good grief. If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
posted by WolfDaddy at 2:17 PM on December 1
Oh for the love of Christ. 3.5 million and you actually don't even know how the estate tax actually works. Hint: most of that isn't going to be taxed at all. So have a gold-plated Coke and a smile, and thank your lucky stars you were born into wealth.
posted by Optimus Chyme at 4:11 PM on December 17, 2009 [1 favorite]
posted by WolfDaddy at 2:17 PM on December 1
Oh for the love of Christ. 3.5 million and you actually don't even know how the estate tax actually works. Hint: most of that isn't going to be taxed at all. So have a gold-plated Coke and a smile, and thank your lucky stars you were born into wealth.
posted by Optimus Chyme at 4:11 PM on December 17, 2009 [1 favorite]
If you have 3 1/2 million dollars, you are uber-wealthy. This is, frankly, definitional.
Well, that would mean nearly every small business owner is "uber-wealthy," and I don't buy that. What happens when you get to $100M? Is that super-uber-wealthy? How about $1B? Is that stratospherically wealthy? I am not arguing against estate taxes, btw, just think the terminology is funny.
Not the biggest Chris Rock fan, but I liked what he said about it once. He said that the new hit rappers all think they're wealthy because of all their cash. He pointed out that those people are rich, not wealthy. The person who's signing the check: that's wealthy.
Fact is, if you have $3.5M, you're well off, rich even. But you're not really in the upper class in the US.
posted by krinklyfig at 4:12 PM on December 17, 2009
Well, that would mean nearly every small business owner is "uber-wealthy," and I don't buy that. What happens when you get to $100M? Is that super-uber-wealthy? How about $1B? Is that stratospherically wealthy? I am not arguing against estate taxes, btw, just think the terminology is funny.
Not the biggest Chris Rock fan, but I liked what he said about it once. He said that the new hit rappers all think they're wealthy because of all their cash. He pointed out that those people are rich, not wealthy. The person who's signing the check: that's wealthy.
Fact is, if you have $3.5M, you're well off, rich even. But you're not really in the upper class in the US.
posted by krinklyfig at 4:12 PM on December 17, 2009
that would mean nearly every small business owner is "uber-wealthy"
Not even close. (Hint: debt is subtracted from equity to measure wealth.) How do you figure the local ethnic restaurant or dry cleaner is worth $3.5 million? What assets add up to that? I ran a small business for 9 years, and made a decent living, but I doubt the wealth of the business ever amounted to $100,000.
posted by msalt at 4:24 PM on December 17, 2009
Not even close. (Hint: debt is subtracted from equity to measure wealth.) How do you figure the local ethnic restaurant or dry cleaner is worth $3.5 million? What assets add up to that? I ran a small business for 9 years, and made a decent living, but I doubt the wealth of the business ever amounted to $100,000.
posted by msalt at 4:24 PM on December 17, 2009
Not even close. (Hint: debt is subtracted from equity to measure wealth.) How do you figure the local ethnic restaurant or dry cleaner is worth $3.5 million?
Well, I don't really want to get into splitting hairs, but plenty of small businesses are worth that much, including the one I work for. The owner of this small business isn't rich.
posted by krinklyfig at 4:32 PM on December 17, 2009
Well, I don't really want to get into splitting hairs, but plenty of small businesses are worth that much, including the one I work for. The owner of this small business isn't rich.
posted by krinklyfig at 4:32 PM on December 17, 2009
We can repeal the estate tax once I've got my 40 acres + mule.
posted by Eideteker at 4:41 PM on December 17, 2009
posted by Eideteker at 4:41 PM on December 17, 2009
Thing is, it's such an onerous and destructive tax that everyone has to arrange their affairs to avoid it.
posted by tad at 3:37 PM on December 17 [+] [!]
EVERYONE? That's some big hyperbole right there. The estate tax kicks in at a taxable estate (i.e., after expenses, gifts to surviving spouse and to charity) of $3.5M, and the tax rate is a maximum of 45%. If you consider that "confiscatory," you aren't old enough to remember the tax rates that actually kept the US running (e.g., before Reagan). Top income tax rates in this country have at times exceeded 90%. Ninety percent. And those were income taxes - the highest estate tax rate over the last two decades has been 55%. Frankly, between the deductions for property passing to your spouse or to charity, there are very few estates that are taxable in the US, and very, very few of those pay substantial estate taxes. Yes, the values of real estate and other assets have gone up, and that can push an otherwise untaxable estate over the edge, but unless the net value of the house (after the mortgage) is ginormous, you haven't entered the realm of estate taxes without being what I call wealthy. Further, the claim that the estate tax is ruining small businesses is baloney. First of all there are special estate tax benefits for family businesses and second, if your business is that big, and you haven't done some fairly basic estate tax planning, you are a fool. There are plenty of legal ways to keep a modicum of control and still pass your business to the next generation without paying a lot of gift or estate tax. And then there is the way to make sure your estate pays more than its fair share of estate taxes: follow the advice of these hotel seminar guys - the ones who try to sell you on some exotic trust to "keep away the taxman." The IRS laughs, your state department of revenue laughs and the trusts & estates attorneys clean up. (Although, since my income depends on cleaning up the mess these bozos make, I guess I should encourage more people to go.)
At the end of the day, what's funny is that the people who bitch and moan the loudest about the "death" tax are not the very wealthy - those whose estates will pay lots of tax - instead, it's the people who don't have a hope in hell of dying with an estate that's taxable.
posted by redfisch at 4:41 PM on December 17, 2009 [7 favorites]
posted by tad at 3:37 PM on December 17 [+] [!]
EVERYONE? That's some big hyperbole right there. The estate tax kicks in at a taxable estate (i.e., after expenses, gifts to surviving spouse and to charity) of $3.5M, and the tax rate is a maximum of 45%. If you consider that "confiscatory," you aren't old enough to remember the tax rates that actually kept the US running (e.g., before Reagan). Top income tax rates in this country have at times exceeded 90%. Ninety percent. And those were income taxes - the highest estate tax rate over the last two decades has been 55%. Frankly, between the deductions for property passing to your spouse or to charity, there are very few estates that are taxable in the US, and very, very few of those pay substantial estate taxes. Yes, the values of real estate and other assets have gone up, and that can push an otherwise untaxable estate over the edge, but unless the net value of the house (after the mortgage) is ginormous, you haven't entered the realm of estate taxes without being what I call wealthy. Further, the claim that the estate tax is ruining small businesses is baloney. First of all there are special estate tax benefits for family businesses and second, if your business is that big, and you haven't done some fairly basic estate tax planning, you are a fool. There are plenty of legal ways to keep a modicum of control and still pass your business to the next generation without paying a lot of gift or estate tax. And then there is the way to make sure your estate pays more than its fair share of estate taxes: follow the advice of these hotel seminar guys - the ones who try to sell you on some exotic trust to "keep away the taxman." The IRS laughs, your state department of revenue laughs and the trusts & estates attorneys clean up. (Although, since my income depends on cleaning up the mess these bozos make, I guess I should encourage more people to go.)
At the end of the day, what's funny is that the people who bitch and moan the loudest about the "death" tax are not the very wealthy - those whose estates will pay lots of tax - instead, it's the people who don't have a hope in hell of dying with an estate that's taxable.
posted by redfisch at 4:41 PM on December 17, 2009 [7 favorites]
Well, that would mean nearly every small business owner is "uber-wealthy," and I don't buy that.
To be clear, I meant net worth. Not someone with 3.5M in assets and 3.3M in debt.
I do not believe for an instant that "nearly every" small business owner has 3.5M net.
I grabbed net-worth data from 2004; it was lying around easily accessible. In that year, having a net worth of 3.5M would put you in the 99.8th percentile. So, yeah, uber-wealthy.
posted by ROU_Xenophobe at 4:43 PM on December 17, 2009 [3 favorites]
To be clear, I meant net worth. Not someone with 3.5M in assets and 3.3M in debt.
I do not believe for an instant that "nearly every" small business owner has 3.5M net.
I grabbed net-worth data from 2004; it was lying around easily accessible. In that year, having a net worth of 3.5M would put you in the 99.8th percentile. So, yeah, uber-wealthy.
posted by ROU_Xenophobe at 4:43 PM on December 17, 2009 [3 favorites]
I guess what I'm saying is, how far do you think we should take this "gift" idea?
U.S. government says eleven thousand dollars.
If you have 3 1/2 million dollars, you are uber-wealthy. This is, frankly, definitional.
There's wiggle room on that definition. High net worth, on the other hand....
Mind you, the truly truly wealthy, the kind whose phone calls get answered by senators and such have nothing to worry about since their estates are specifically written into the tax code (no names, of course, just weird conditions that must apply to someone, someone whose tax lawyer will invoke them come audit time). There are tax experts who read the code for professional reasons and find these nuggets the rare entertainment value part of their jobs.
By the way, what's the answer to the keeping the family farm/small family business in the family objection? Not snarking, 'cause it sure as hell ain't my circumstance. I'm just curious.
posted by IndigoJones at 4:44 PM on December 17, 2009
U.S. government says eleven thousand dollars.
If you have 3 1/2 million dollars, you are uber-wealthy. This is, frankly, definitional.
There's wiggle room on that definition. High net worth, on the other hand....
Mind you, the truly truly wealthy, the kind whose phone calls get answered by senators and such have nothing to worry about since their estates are specifically written into the tax code (no names, of course, just weird conditions that must apply to someone, someone whose tax lawyer will invoke them come audit time). There are tax experts who read the code for professional reasons and find these nuggets the rare entertainment value part of their jobs.
By the way, what's the answer to the keeping the family farm/small family business in the family objection? Not snarking, 'cause it sure as hell ain't my circumstance. I'm just curious.
posted by IndigoJones at 4:44 PM on December 17, 2009
(I don't mean to pick on wolfdaddy, and know he's an excellent fellow. But still, having to deal with the consequences of a multimillion dollar inheritance is something very few people have to deal with, not a normal workaday concern of everyday folks.)
posted by ROU_Xenophobe at 4:45 PM on December 17, 2009
posted by ROU_Xenophobe at 4:45 PM on December 17, 2009
IndigoJones, the article you cite is somewhat dated - the amount that any individual can give to any number of other individuals without it being a taxable gift (the annual exclusion) is now $13,000. It's also indexed for inflation.
posted by redfisch at 4:52 PM on December 17, 2009
posted by redfisch at 4:52 PM on December 17, 2009
Oh for the love of Christ. 3.5 million and you actually don't even know how the estate tax actually works. Hint: most of that isn't going to be taxed at all. So have a gold-plated Coke and a smile, and thank your lucky stars you were born into wealth.
...and you obviously seem to have missed the entire reason for concern for me and my gold plated Coca-Cola's is that after this "free" year coming up, we go back to pre-Bush tax cuts, ie, a $675k exemption at 55%.
Your resentment and lack of reading comprehension ... is deliciious.
posted by WolfDaddy at 4:54 PM on December 17, 2009
...and you obviously seem to have missed the entire reason for concern for me and my gold plated Coca-Cola's is that after this "free" year coming up, we go back to pre-Bush tax cuts, ie, a $675k exemption at 55%.
Your resentment and lack of reading comprehension ... is deliciious.
posted by WolfDaddy at 4:54 PM on December 17, 2009
I guess you better kill someone before 2010, then!
posted by Optimus Chyme at 4:59 PM on December 17, 2009
posted by Optimus Chyme at 4:59 PM on December 17, 2009
3 and a half million dollars accumulated over 100 years
$3.5 million throws off around $150,000/yr after capital gains tax.
That is by any definition enough for a single family to be "independently wealthy".
posted by tad at 5:03 PM on December 17, 2009 [1 favorite]
$3.5 million throws off around $150,000/yr after capital gains tax.
That is by any definition enough for a single family to be "independently wealthy".
posted by tad at 5:03 PM on December 17, 2009 [1 favorite]
we go back to pre-Bush tax cuts, ie, a $675k exemption at 55%.
yes, this is the part that sucks. I don't see the point of Estate Taxes at that level, and as I've said above, they don't make that much sense to me at any level; better to tax the economic activity of the estate directly and not the asset transfer itself.
posted by tad at 5:09 PM on December 17, 2009
yes, this is the part that sucks. I don't see the point of Estate Taxes at that level, and as I've said above, they don't make that much sense to me at any level; better to tax the economic activity of the estate directly and not the asset transfer itself.
posted by tad at 5:09 PM on December 17, 2009
What pineapple says is solid.
Wealth should be taxed increasingly as the value goes up. Have 99.99% tax on all that is in excess of a billion dollars. 80% tax on that in excess of $100M. 50% tax on that in excess of $10M.
We need to properly handle the L-Curve, or the world is going to fly apart as the unhappy impoverished take up against inequality of opportunity.
posted by five fresh fish at 5:27 PM on December 17, 2009 [4 favorites]
Wealth should be taxed increasingly as the value goes up. Have 99.99% tax on all that is in excess of a billion dollars. 80% tax on that in excess of $100M. 50% tax on that in excess of $10M.
We need to properly handle the L-Curve, or the world is going to fly apart as the unhappy impoverished take up against inequality of opportunity.
posted by five fresh fish at 5:27 PM on December 17, 2009 [4 favorites]
We need to properly handle the L-Curve
With that bludgeon, or a scalpel.
posted by tad at 7:21 PM on December 17, 2009
With that bludgeon, or a scalpel.
posted by tad at 7:21 PM on December 17, 2009
Not the biggest Chris Rock fan, but I liked what he said about it once. He said that the new hit rappers all think they're wealthy because of all their cash. He pointed out that those people are rich, not wealthy. The person who's signing the check: that's wealthy.
I was just thinking about the same bit. Here's the clip.
posted by inconsequentialist at 7:32 PM on December 17, 2009
I was just thinking about the same bit. Here's the clip.
posted by inconsequentialist at 7:32 PM on December 17, 2009
I dunno, there. Your scalpel looks to have some serious, bludgeoning flaws itself.
We need fair taxation, such that there is a large enough disparity between the lifestyles of the Rich and the Poor such that the the Rich feel well-privileged; and a smaller disparity between the lifestyles of The Richest and those who are merely The Rich.
At some point, there is just no point in monetary reward. We need a new type of measure, so that once one has amassed enough wealth to live an absurdly ostentatious lifestyle by comparison to the most-impoverished, there's a new way to mark territory.
We need Space Dollars. Let the ultra-wealthy become the future human spacemen. Detach the lower-, middle-, upper-, super-, ultra-wealthy from the obscenely wealthy.
posted by five fresh fish at 8:30 PM on December 17, 2009
We need fair taxation, such that there is a large enough disparity between the lifestyles of the Rich and the Poor such that the the Rich feel well-privileged; and a smaller disparity between the lifestyles of The Richest and those who are merely The Rich.
At some point, there is just no point in monetary reward. We need a new type of measure, so that once one has amassed enough wealth to live an absurdly ostentatious lifestyle by comparison to the most-impoverished, there's a new way to mark territory.
We need Space Dollars. Let the ultra-wealthy become the future human spacemen. Detach the lower-, middle-, upper-, super-, ultra-wealthy from the obscenely wealthy.
posted by five fresh fish at 8:30 PM on December 17, 2009
Whoops, move that "from the" back one descriptor.
posted by five fresh fish at 8:30 PM on December 17, 2009
posted by five fresh fish at 8:30 PM on December 17, 2009
I find it odd that people naturally assume we must pay taxes on all received monies.
I find it odd that you think you should get the extensive benefits of money without paying for it. If you don't like paying taxes, don't use money.
posted by Jimmy Havok at 10:15 PM on December 17, 2009 [2 favorites]
I find it odd that you think you should get the extensive benefits of money without paying for it. If you don't like paying taxes, don't use money.
posted by Jimmy Havok at 10:15 PM on December 17, 2009 [2 favorites]
I see we have a few whiny bitches here complaining that they are going to have to pay some taxes on money they didn't do a lick of work for.
Making nice to your rich ancestors doesn't count as work.
posted by Jimmy Havok at 10:24 PM on December 17, 2009
Making nice to your rich ancestors doesn't count as work.
posted by Jimmy Havok at 10:24 PM on December 17, 2009
after this "free" year coming up, we go back to pre-Bush tax cuts, ie, a $675k exemption at 55%.
I'm not an accountant, but doesn't transferring wealth into a non-profit — what you said you were doing — confer significant tax relief, which would disconnect your concerns about estate taxation policy fluctuations from the philanthropic goals you are trying to reach?
posted by Blazecock Pileon at 11:58 PM on December 17, 2009 [1 favorite]
I'm not an accountant, but doesn't transferring wealth into a non-profit — what you said you were doing — confer significant tax relief, which would disconnect your concerns about estate taxation policy fluctuations from the philanthropic goals you are trying to reach?
posted by Blazecock Pileon at 11:58 PM on December 17, 2009 [1 favorite]
All money donated from an estate to a charitable organization is completely tax-exempt.
posted by mek at 12:03 AM on December 18, 2009
posted by mek at 12:03 AM on December 18, 2009
At worst, he'll be paying 10-20% tax on half of it. Big fuckty whoop.
Meanwhile, people don't have food in your nation. Cities get destroyed by natural disasters and recovery takes eons. People are homeless, lack healthcare, and can't get a solid public education.
Pay your taxes, you over-privileged douchebag. With all the loopholes and the accountant you can afford, you're going to pay shit-all toward the public good anyway: at least man up and do it without whining.
No hard feelings about you otherwise, but your whinge in here is balls-out vulgar given the state of the nation.
posted by five fresh fish at 12:04 AM on December 18, 2009 [4 favorites]
Meanwhile, people don't have food in your nation. Cities get destroyed by natural disasters and recovery takes eons. People are homeless, lack healthcare, and can't get a solid public education.
Pay your taxes, you over-privileged douchebag. With all the loopholes and the accountant you can afford, you're going to pay shit-all toward the public good anyway: at least man up and do it without whining.
No hard feelings about you otherwise, but your whinge in here is balls-out vulgar given the state of the nation.
posted by five fresh fish at 12:04 AM on December 18, 2009 [4 favorites]
I find it odd that you think you should get the extensive benefits of money without paying for it.
Yes, that is my basic default philosophy. A person is entitled to the products of his labor. While the recipient of an inheritance didn't work for it, neither did anyone else in line to get it via taxation.
The right-libertarians end their thinking there, but as a left-libertarian I recognize that intergenerational feedback effects make such minarchy unworkable as the rich get richer and the poor get poorer. If I were KIng everyone would have access to the goods & services necessary to become and remain a productive member of society, without regard to ability to pay.
To pay for this, instead of confiscatory taxation on estates, I'd like to see everyone liberated from the need to game the system to get something for nothing and start focusing on just creating wealth again. The more wealth we create the lower taxes have to be on all.
IMO taxing rentiers (profiting from land monopoly and natural resource ownership) is necessary and (perhaps!) sufficient to move to a more productive society.
posted by tad at 1:43 AM on December 18, 2009
Yes, that is my basic default philosophy. A person is entitled to the products of his labor. While the recipient of an inheritance didn't work for it, neither did anyone else in line to get it via taxation.
The right-libertarians end their thinking there, but as a left-libertarian I recognize that intergenerational feedback effects make such minarchy unworkable as the rich get richer and the poor get poorer. If I were KIng everyone would have access to the goods & services necessary to become and remain a productive member of society, without regard to ability to pay.
To pay for this, instead of confiscatory taxation on estates, I'd like to see everyone liberated from the need to game the system to get something for nothing and start focusing on just creating wealth again. The more wealth we create the lower taxes have to be on all.
IMO taxing rentiers (profiting from land monopoly and natural resource ownership) is necessary and (perhaps!) sufficient to move to a more productive society.
posted by tad at 1:43 AM on December 18, 2009
While the recipient of an inheritance didn't work for it, neither did anyone else in line to get it via taxation.
The government (the people!) promoted and protected the stability and security in order to allow a person to accumulate that wealth throughout their lifetime. That person was able to enjoy that wealth due to the actions and assurances of the government, which is to say, his/her fellow man. So yeah, the government (again, everyone else, the people!) is in line to get it via taxation.
posted by explosion at 4:19 AM on December 18, 2009 [6 favorites]
The government (the people!) promoted and protected the stability and security in order to allow a person to accumulate that wealth throughout their lifetime. That person was able to enjoy that wealth due to the actions and assurances of the government, which is to say, his/her fellow man. So yeah, the government (again, everyone else, the people!) is in line to get it via taxation.
posted by explosion at 4:19 AM on December 18, 2009 [6 favorites]
"Onerous and destructive" are pretty strong words to apply to a percentage given to the government out of a big chunk of cash that no longer has an owner.
Frankly, I'm surprised you even bother calling it the estate tax and not just going straight for the more inflammatory "death tax".
Let's call it the "abandoned property tax."
posted by one more dead town's last parade at 5:34 AM on December 18, 2009 [3 favorites]
Frankly, I'm surprised you even bother calling it the estate tax and not just going straight for the more inflammatory "death tax".
Let's call it the "abandoned property tax."
posted by one more dead town's last parade at 5:34 AM on December 18, 2009 [3 favorites]
If only there were a cute slogan to explain to the right wingers that the freedoms and quality of life of being an American cost money.
I guess we need to keep on thinking. It's not like we'll find it emblazoned on Tom Clancy books or on bumper stickers.
posted by mccarty.tim at 5:38 AM on December 18, 2009
I guess we need to keep on thinking. It's not like we'll find it emblazoned on Tom Clancy books or on bumper stickers.
posted by mccarty.tim at 5:38 AM on December 18, 2009
tad re: the Land Value Tax.
I'm not an economist, but that strikes me as being a rather 18th or 19th century bit of thinking. Land isn't the ultimate measure of value anymore, or even really in the top ten. Yes, you've got to have land, somewhere, to put factories and whatnot on, but outside a few places (the Ginza, Manhattan, Hong Kong, etc) land itself is not really all that valuable.
Look at Microsoft, for example. Is its value in the physical land that their campus in Redmond occupies? Of course not. It's in the non-land, non-material, stuff that they make there.
I think the idea that a Land Value Tax is even worthwhile, much less a panacea, is rooted in the past, when land really was the key measure of value and wealth. That isn't the case today.
posted by sotonohito at 6:16 AM on December 18, 2009 [1 favorite]
I'm not an economist, but that strikes me as being a rather 18th or 19th century bit of thinking. Land isn't the ultimate measure of value anymore, or even really in the top ten. Yes, you've got to have land, somewhere, to put factories and whatnot on, but outside a few places (the Ginza, Manhattan, Hong Kong, etc) land itself is not really all that valuable.
Look at Microsoft, for example. Is its value in the physical land that their campus in Redmond occupies? Of course not. It's in the non-land, non-material, stuff that they make there.
I think the idea that a Land Value Tax is even worthwhile, much less a panacea, is rooted in the past, when land really was the key measure of value and wealth. That isn't the case today.
posted by sotonohito at 6:16 AM on December 18, 2009 [1 favorite]
Oh, good grief. If most of you think just a little more than 3 and a half million dollars accumulated over 100 years (and taxed appropriately in a multitude of ways and this is what's left) and 5 generations is "uber-wealthy" in this day and age I don't have anything to contest with you.
According to this, if you're younger than 50 you're in the top 1%. If you're over 50, you're still in the top 5%.
posted by rocket88 at 6:52 AM on December 18, 2009 [1 favorite]
According to this, if you're younger than 50 you're in the top 1%. If you're over 50, you're still in the top 5%.
posted by rocket88 at 6:52 AM on December 18, 2009 [1 favorite]
is rooted in the past, when land really was the key measure of value and wealth. That isn't the case today
Perhaps. But I find the monopolization of land by the wealthy to be just as abhorrent as Henry George (and Mark Twain, Tolstoi, Churchill, JS Mill, etc). One third of this country doesn't have disposable income, and one third rents. This is largely the same third! The fundamentals in the book Progress & Poverty are still with us -- people still have to scramble for the rent, and always will since land is still fixed in supply, and it's all taken.
And the price we pay for it is still a form of surplus that can be taxed. Even WF Buckley and Milton Friedman are on record as saying the LVT is the least-bad tax.
Georgists like Mason Gaffney make the argument that all taxes come out of rents. This is why I think the mandate that people have to get health insurance is a very good idea. The $200/mo or whatever sounds like it will destroy personal spending, but if Gaffney is right then the $200 will largely come out of rents, since rent is the largest item on nearly everyone's household balance sheet, and rent is driven on after-tax household income, not production cost of the home (which is approaching $0 for most rented stock these days).
posted by tad at 9:29 AM on December 18, 2009
Perhaps. But I find the monopolization of land by the wealthy to be just as abhorrent as Henry George (and Mark Twain, Tolstoi, Churchill, JS Mill, etc). One third of this country doesn't have disposable income, and one third rents. This is largely the same third! The fundamentals in the book Progress & Poverty are still with us -- people still have to scramble for the rent, and always will since land is still fixed in supply, and it's all taken.
And the price we pay for it is still a form of surplus that can be taxed. Even WF Buckley and Milton Friedman are on record as saying the LVT is the least-bad tax.
Georgists like Mason Gaffney make the argument that all taxes come out of rents. This is why I think the mandate that people have to get health insurance is a very good idea. The $200/mo or whatever sounds like it will destroy personal spending, but if Gaffney is right then the $200 will largely come out of rents, since rent is the largest item on nearly everyone's household balance sheet, and rent is driven on after-tax household income, not production cost of the home (which is approaching $0 for most rented stock these days).
posted by tad at 9:29 AM on December 18, 2009
So yeah, the government (again, everyone else, the people!) is in line to get it via taxation.
thus the full-employment of tax accountants. It's really unseemly and I think there are much better approaches available (see above!) to secure a true level playing field for all. I stand to inherit a $300,000 homestead from my mom, and I don't see the how or why the government should be in line to get a piece of that off the top, so I just extend the logic out to $10M or $100M.
Granted, death is the one thing that can't be avoided so estate taxes are not as distortionary as other taxes. My argument is simply that if we had a totally different tax regime the estate tax would be unnecessary.
posted by tad at 9:42 AM on December 18, 2009
thus the full-employment of tax accountants. It's really unseemly and I think there are much better approaches available (see above!) to secure a true level playing field for all. I stand to inherit a $300,000 homestead from my mom, and I don't see the how or why the government should be in line to get a piece of that off the top, so I just extend the logic out to $10M or $100M.
Granted, death is the one thing that can't be avoided so estate taxes are not as distortionary as other taxes. My argument is simply that if we had a totally different tax regime the estate tax would be unnecessary.
posted by tad at 9:42 AM on December 18, 2009
It's really unseemly and I think there are much better approaches available (see above!) to secure a true level playing field for all. I stand to inherit a $300,000 homestead from my mom, and I don't see the how or why the government should be in line to get a piece of that off the top, so I just extend the logic out to $10M or $100M.
The government is in line to tax that income because the government had a part in creating it. Schools, roads, water, electrical and electronic infrastructure. Making sure the Russkis don't enslave you. Do you see any of this? If you're really that concerned, move to Somalia and build your empire there without the brutal yoke of taxation and government.
posted by Optimus Chyme at 11:16 AM on December 18, 2009
The government is in line to tax that income because the government had a part in creating it. Schools, roads, water, electrical and electronic infrastructure. Making sure the Russkis don't enslave you. Do you see any of this? If you're really that concerned, move to Somalia and build your empire there without the brutal yoke of taxation and government.
posted by Optimus Chyme at 11:16 AM on December 18, 2009
$300,000 - you won't pay a dime of taxes on it under any of these scenarios. The highest estate tax possible here has a $675,000 exemption, and it's certain to go to at least a million.
so I just extend the logic out to $10M or $100M
Well, it doesn't scale like that. $300,000 is a slightly above average house, or a small condo in a big city. $100 million buys you a major league sports franchise, or a broadcast TV station is a sizable city.
posted by msalt at 11:21 AM on December 18, 2009
so I just extend the logic out to $10M or $100M
Well, it doesn't scale like that. $300,000 is a slightly above average house, or a small condo in a big city. $100 million buys you a major league sports franchise, or a broadcast TV station is a sizable city.
posted by msalt at 11:21 AM on December 18, 2009
$100 million buys you a major league sports franchise, or a broadcast TV station is a sizable city.
and?
These investments throw off income, and thus taxes, too. Tax the flow, not the asset.
posted by tad at 11:28 AM on December 18, 2009
and?
These investments throw off income, and thus taxes, too. Tax the flow, not the asset.
posted by tad at 11:28 AM on December 18, 2009
If you're really that concerned, move to Somalia and build your empire there without the brutal yoke of taxation and government.
thing is, with the current tax regime, most of us are broke, with negative net worth, workin' for the Man. Something is rotten in the state of denmark, and until I found the Georgist religion I couldn't put my finger on it -- the neo-classic economists successfully conflated land with capital, blinding my sight.
Don't get me wrong, I'm not shedding any tears for the $100M fortunes that are getting hit with this tax, Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu'il a été proprement fait, but as I've said several times I believe there's a better way to run the railroad.
posted by tad at 11:35 AM on December 18, 2009
thing is, with the current tax regime, most of us are broke, with negative net worth, workin' for the Man. Something is rotten in the state of denmark, and until I found the Georgist religion I couldn't put my finger on it -- the neo-classic economists successfully conflated land with capital, blinding my sight.
Don't get me wrong, I'm not shedding any tears for the $100M fortunes that are getting hit with this tax, Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu'il a été proprement fait, but as I've said several times I believe there's a better way to run the railroad.
posted by tad at 11:35 AM on December 18, 2009
Tax the flow, not the asset.
posted by Optimus Chyme at 11:36 AM on December 18, 2009 [9 favorites]
dead person → you
tax ↗posted by Optimus Chyme at 11:36 AM on December 18, 2009 [9 favorites]
The problem I see with land taxation is that in the end it results in even more monopolization of land ownership, since those who cannot generate a sufficient income stream from the property will eventually lose it to those who are willing to do whatever it takes to generate that income. That's the root problem of capitalism: it rewards those who are willing to do whatever it takes to generate income.
Taxes boil down to a means of controlling inflation. The government is allowed to print money, but if they print too much, its value disappears. Taxation reclaims a portion of the money the government prints and keeps the money supply from becoming too great.
There are other means of controlling both the money supply and inflation, but they are for the most part much more brutal and less precise than taxation. For example, unemployment is used to control wage inflation, via the Fed's control of interest rates. That's a very indirect method, and easily swings out of control due to the interference of other factors, including political pressures.
posted by Jimmy Havok at 11:46 AM on December 19, 2009 [1 favorite]
Taxes boil down to a means of controlling inflation. The government is allowed to print money, but if they print too much, its value disappears. Taxation reclaims a portion of the money the government prints and keeps the money supply from becoming too great.
There are other means of controlling both the money supply and inflation, but they are for the most part much more brutal and less precise than taxation. For example, unemployment is used to control wage inflation, via the Fed's control of interest rates. That's a very indirect method, and easily swings out of control due to the interference of other factors, including political pressures.
posted by Jimmy Havok at 11:46 AM on December 19, 2009 [1 favorite]
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