Topic: Inheritance tax? (Read 3307 times)

FUSSCCJ · « **on:** May 01, 2005, 01:26:06 PM »

Currently the United States Congress is considering repealing (House) or significatly reducing (Senate) the inheritance tax. I'd like to discuss the US case specifically and hopefully deal with some of the philisophical differences in that context.

Currently the tax is being gradually reduced until 2011, when it will revert to how it was in 2001, meaning there will be a 55% tax on all inherited assets beyond one million dollars. Currently (2005) the tax is collected on assets above 1.5 million dollars, meaning about 18,800 people (less than 1% of those who die anually). Of those 18,800, only about 440 will leave "estates with assets primarily generated by farms or family-owned businesses" (Zuckerman, US News&World Report, 5/2/05, p 72). This year the tax will bring in about $18 billion, and eliminating it would cost about $745 billion from 2012-2021 (without interest). Also, the 55% tax rate is deceiving, because that is only on the amount above the limit (currently $1.5 million) with state taxes and charitable bequests treated as deductions.

The inheritance tax was originally put into place by President Theodore Roosevelt, who said that a "man of great wealth owes a particular obligation to the state because he derives special advantage from the mere exisence of government." The reasoning behind the inheritance tax is generally that the inheritees did little to deserve that amount of money/assets (meaning more than $1.5 million). Based on merit, while family/friends may be entitled to a bit, they are certainly not intitled to all of the inheritance.

What do you think? Should Americans be allowed to have tax-free income as long as it's from dead people? Does the current budget deficit (and federal deficit) allow for such a loss in revenue?

Anthony Horvath · « **Reply #1 on:** May 01, 2005, 02:52:09 PM »

Tax the snot out of them when they are alive, tax the snot out of them when they are dead. No wonder rich people look for loopholes, etc. Does anyone blame them? I take that back; everyone blames them. I personally don't.

Broken · « **Reply #2 on:** May 02, 2005, 05:26:54 PM »

Quote from: FUSSCCJ

What do you think? Should Americans be allowed to have tax-free income as long as it's from dead people? Does the current budget deficit (and federal deficit) allow for such a loss in revenue?

It seems rather strange to me that Soc Sec is such a budget "crisis", with the proposed fix that middle income people get their benefits reduced, yet the same politicians are pushing a tax-break so rich kids can afford a second yacht.

Anthony Horvath · « **Reply #3 on:** May 02, 2005, 07:50:16 PM »

Seems a matter of principle, to me. What right does anyone have to tax people over and over and over again just because they can afford it? For that matter, I would be glad to see my benefits cut. Eliminate them altogether for all I care. I have a better chance at being rich myself if I had full access to my own darn income, and then I wouldn't need my 'benefits.'

The Sasquatch · « **Reply #4 on:** May 02, 2005, 09:54:39 PM »

I think the U.S. government should use tax money to buy ice cream for everybody. Because, really, who doesn't want some ice cream?

Anthony Horvath · « **Reply #5 on:** May 02, 2005, 09:58:23 PM »

That's a good point, Sasq. Sometimes I wish I could put things in perspective the way that you can. :(

FUSSCCJ · « **Reply #6 on:** May 02, 2005, 09:58:25 PM »

Not when you got old you wouldn't sntjohnny. And that's exactly what Soc. Sec. is, SECURITY...but I digress...

Three questions for sntjohnny:

1. Do you believe in distributive justice, and if so how do you dofine it?

2. Do you believe in equality of opportunity, and if so how do you define it?

3. Why don't conservatives or libertarians (who hold the positions you are advocating) fight against welfare to agribusiness (biggest one of the larger culprits), other corporations, and the middle and upper classes like they do against welfare for the poor?

Anthony Horvath · « **Reply #7 on:** May 02, 2005, 10:11:17 PM »

"Not when you got old you wouldn't sntjohnny. And that's exactly what Soc. Sec. is, SECURITY...but I digress..."

But I could obtain that security on my own, and that's my point. Have you ever played that investment numbers game when you take your investment and put it into a place with compound interest? Its really amazing. Even small amounts can add up to hundreds of thousands of dollars in thirty years. Use the number $200, which is a low ball estimate of how much I was paying a month while working at the church, at 5% interest for 30 years. Check out my balance in 30 years.

Three questions for sntjohnny:

"Do you believe in distributive justice, and if so how do you dofine it?"

Probably not. But it would depend on how you defined it.

"Do you believe in equality of opportunity, and if so how do you define it?"

Possibly. If by 'equality of opportunity' you mean, 'everybody has the the equal right to work to their own unique abilities' it would be a resounding yes. If equality requires holding back talented people, I'm decidedly opposed.

"Why don't conservatives or libertarians (who hold the positions you are advocating) fight against welfare to agribusiness"

*shrug* I oppose it, personally. I also am in favor of a general dismantling of corporations as they are currently understood, especially in regards to how they have priviledges that individuals don't have. For example, in regards to bankruptcy.

SoughtFound&Alive · « **Reply #8 on:** May 04, 2005, 08:10:55 AM »

I may be simple minded when it comes to politics but why tax inheritance at all. This is money that has already been taxed and then handed down to someone else. Sounds like a gift to me and why would we tax a gift?

TheAntiChrist · « **Reply #9 on:** May 06, 2005, 03:53:39 PM »

because the goverment needs it to buy a 50 dollar toilet seat.

Vose · « **Reply #10 on:** May 06, 2005, 05:30:02 PM »

Alas, I remember the good old days when americans would form an angry mob and raise cane when the government tried to take 1 or 2 percent of their income. Now the government practically rapes our pocketbooks and wasted alot of it. Even so, give unto Ceasar the things which are Ceasars, and unto God the things which are Gods. Store up you treasure in heaven.

FUSSCCJ · « **Reply #11 on:** May 06, 2005, 09:56:53 PM »

"Possibly. If by 'equality of opportunity' you mean, 'everybody has the the equal right to work to their own unique abilities' it would be a resounding yes. If equality requires holding back talented people, I'm decidedly opposed. "

How can everyone work to their own unique abilities if, for financial reasons, certain individuals aren't even given the "tools" they need to develop, such as a decent education, job training, types of social welfare (a kid without healthcare isn't going to be able to work to his abilities like a kid with healthcare)? Wouldn't all those need to be provided at sufficiency level for everyone to accomplish equal opportunity?

"I may be simple minded when it comes to politics but why tax inheritance at all. This is money that has already been taxed and then handed down to someone else. Sounds like a gift to me and why would we tax a gift?"

Is the inheritance tax a double tax? This is mainly a tax on assets (over $1.5 million after deducting charitable contributions) and "the largest estates are basically made up of stocks, business assets, and long-held property" (Zuckerman, 72). Assets are only taxed when they are sold, so most of this has never been taxed once.

Should we tax gifts? Well, we do tax income, and inheritance is certainly a form of income for many. If your employer gives you a bonus that's not part of what he owes you it is a gift, should that be taxed as income? In tax law, there is an exemption up to a certain amounts for gifts, but the inheritance here is certainly about that amount.

nojc4me · « **Reply #12 on:** May 06, 2005, 10:47:36 PM »

3. Why don't conservatives or libertarians (who hold the positions you are advocating) fight against welfare to agribusiness (biggest one of the larger culprits), other corporations, and the middle and upper classes like they do against welfare for the poor?

As a libertarian, I would like to respond to this question.
The first question is based upon an incorrect premise, as Neal Boortz would point out.
You asked, Why don't ... libertarians ... fight against welfare to agribusiness, other corporations, and the middle and upper classes like they do against welfare for the poor?
The incorrect premise is that we don't fight against welfare for certain parties, but do for others. This is incorrect because we do fight against welfare for everybody. We especially rail against welfare for corporations, but also for anybody else.
Welfare is not needed by businesses and corporations at all. If a business cannot survive based upon need, supply, and demand, then is doesn't survive. (This assumes that the government is not needlessly hampering business in any way).
If the government would stop taxing the wealthy and middle class into the stone age, they would not need welfare either. I am not going to deny that the wealthy do receive welfare; we all know that, if one knows how to, one can collect thousands of dollars from the government every year, even while sitting in one's million-dollar mansion with the three car garage filled with two cars and a boat.
Welfare for the poor is counter productive. It replaces the father with a nanny-state, hampers or kills the desire to work for what one wants, and causes those who have been deprived of their goods to resent those who have recieved them for nothing in return.

FUSSCCJ · « **Reply #13 on:** May 09, 2005, 04:34:27 PM »

And what nojc wrote is a wonderful example of a justification for an inheritance tax. If the government is being run for the wealthy (they are recieving major welfare at the same time government is cutting back Medicaid and other programs for the poor) than they should carry more of the tax burden. Now in theory it might be better to get rid of all the tax breaks/welfare, but I'll be fossilized by the time that happens, so this is the realistic option.

nojc4me · « **Reply #14 on:** May 10, 2005, 08:01:33 PM »

Fussy said:

And what nojc wrote is a wonderful example of a justification for an inheritance tax. If the government is being run for the wealthy

That's not what the government's "being run for," and that's not what I said.

(they are recieving major welfare

How is getting back from the government, some of the taxes that had already been confiscated from you "welfare"?

... at the same time government is cutting back Medicaid and other programs for the poor)

I don't recall hearing about any such "cuts". The worst I have heard is a "reduction in the rate of growth." As it was explained to me, the government spends x on welfare, and the rules are such that a certain amount y extra is added automatically (no debate, no vote, it just happens) every year, to get x + y. Then, on certain years, Republicans demand that the amount to be added shouuld be lowered to something closer to sanity, so we would get x + 1/2 y. This still results in an increase in spending on the program, but Democrats always scream bloody murder, calling them "cuts," usually adding flowery and attractive words like, "draconian" and "heartless" and "on the backs of the poor."

...[ then] they should carry more of the tax burden.

Nobody should carry any such tax burder. Not only is it immoral to use guns to take from those who have, it's counter productive, since it increases costs to businesses and consumers alike, and disadvantages American businesses more than foreign ones. So then the government adds tariffs to the foreign products, and American consumers spend more and more for less and less, meanwhile the government is shaving more and more out of their paychecks through income taxes!
Oh, yeah. that sounds like a good plan.

Now in theory it might be better to get rid of all the tax breaks/welfare, but I'll be fossilized by the time that happens, so this is the realistic option.

That's just because you haven't been listening to the radio. HR 25, the Fair Tax, which, when passed, will fully fund Social Security and Medicaid, is gaining speed, and some day soon it will replace the income tax with prosperity, and the IRS will be relaced with, oh, nothing sounds good to me.

Yep. nothing at all!

FUSSCCJ · « **Reply #15 on:** May 16, 2005, 10:36:40 PM »

Quote

How is getting back from the government, some of the taxes that had already been confiscated from you "welfare"?

I dunno, I'm just quoting you. You said, "I am not going to deny that the wealthy do receive welfare; we all know that..."

Anyways, I have a larger question for you. In an economy that guarentees an unemployment rate of at least 3-4% how do you deal with the people that are unemployed?

The Sasquatch · « **Reply #16 on:** May 19, 2005, 06:42:48 PM »

Quote

because the government needs to buy a $50 toilet seat

Actually, that's a pretty good price for a toilet seat.

TheAntiChrist · « **Reply #17 on:** May 20, 2005, 02:40:35 PM »

I meant $500

nojc4me · « **Reply #18 on:** May 20, 2005, 09:02:12 PM »

Fussy asked:

I have a larger question for you. In an economy that guarentees an unemployment rate of at least 3-4% how do you deal with the people that are unemployed?

A) This economy or any other, there WILL be unemployed. No getting around it. So why the rate of unemployment is a problem that needs to be addressed is unclear.
B) That partucular rate of unemployment seems low to me, so I'd say the answer to your question would be, "Throw a party."
C) Why should anyone other than the unemployed be able to or even try to do anything about the unemployed?

FUSSCCJ · « **Reply #19 on:** May 23, 2005, 04:33:54 PM »

If unemployment is a requirement for our economy, then those who are unemployed will have an income problem (or create a crime problem). In this case, either these people need to be taken care of (and while it would be nice to assume that families and charities would deal with all of it, history shows that's not the case) or left to suffer horrible (most would say unacceptable) living conditions.

Now we could tell them to all just go out and get jobs, but the economy will have a certain amount of unemployment no matter what skills the unemployed have and how hard they try to get jobs. Do we just say, "Sucks to be you, glad I'm not in your position" and leave them be? Do we pray to the free market god in the hope that he will solve the problem? Do we require communities to take care of them? Do we rely on the good will of the employed? Do we tell the government to help them? How should we deal with these people?

Author Topic: Inheritance tax? (Read 3307 times)