On the other hand, the family businesses and farms that would be saved would offset any loss.
It can also represent double taxation. IOW the income that built the estate was taxed when earned, then taxed again at death. I think that many people leave money to charities on death NOT because they get a deduction. There are very few of us who have a big enough estate to tax anymore. But many will provide an endowment of some kind at death because obviously they don’t need the money anymore.
Double taxation is rife within government – for example, you can’t deduct your FICA tax from your income, so you pay a tax on that tax. And when you DRAW Social Security, most people pay a tax on that – triple taxation!
I couldn’t vote because I couldn’t choose “none of the above”. The Brookings Institute is liberal and therefore have never met a tax they didn’t like…
Of course the Brookings Institute assumes the money will simply disappear, and not be put to work improving the economy – which is the best charity of all.I couldn’t vote because I couldn’t choose “none of the above”. The Brookings Institute is liberal and therefore have never met a tax they didn’t like…
Pardon me for laughing.http://forums.catholic-questions.org/images/icons/icon10.gif
This reflects a fundamental misunderstanding of economics.
Not at all – the money, as you said would be REinvested (as in the case of your first example.) That means it would go to create things that did not exist before – factories, laboratories, new inventions, and so on. It would make the economy grow.
And if you look at how his holdings are structured, you will see that he has arranged to NOT make them subject to the estate tax. He can afford the lawyers to do that – Mom and Pop at the corner store don’t have expensive lawyers, and their business will will be taxed out of existance when they pass away.
Exactly. When I was at a public CPA firm we worked with attorneys to prevent our wealthy clients from EVER paying a dime in estate taxes. There were ways by using spousal support trusts (sounds like the Gore method) and periodic gifting that could pretty much prevent estate taxes. I heard even the mega wealthy like the Rockefellers were able to avoid estate taxes through trusts, foundations, etc.
The estate tax (more properly called the death tax), aside from being unconstitutional, is one of the cruelest inventions of government. As you said, the truly wealthy aren’t touched by it – it’s the small farmers and family businesses that suffer – and the people who work for those businesses.
Yipdeedo. Bill Gates has also said that he plans on not leaving anything but a modest amount to his kids.
This isn’t a “dodge.” It is a perfectly legal, very commonly used estate tax planning tool. And, it is used by people who certainly aren’t what I call rich. Some also avoid tax by bequests to churches and charities. There is nothing legally or morally wrong with lawfully avoiding tax.
It’s an unapportioned DIRECT tax. And that makes it unconstitutinoal.
Yes – it benefits lawyers and estate planners, and hurts people who don’t know about how to deal with it.
At least one person in this thread (and that’s a fairly small sample) has a personal account of the damage it does.
Why not simply abolish it?
When you have a guy who attacks big oil, and owns oil stock, and when you have a guy who favors high taxes, but gets out of $275,000 in taxes, you have a hypocrite.
That’s correct – although many states gear their taxes to the federal tax code. But as you point out, when you take the federal and state bite, you don’t have much left.
hello Vern,
That’s pretty close to correct – and had we transitioned to Private Retirement Accounts at the end of WWII (as Roosevelt wanted), elderly people in the United States would be much better off.
The “guy” you’re talking about is non-existant.
You’re wrong on two counts – first of all, by no means do “a dozen or so families” hole all the money in Mexico. Secondly, the United States is a highly mobile society, with ordinary, everyday people owning most of the wealth. Read “The Millionaire Next Door.”
I’ve got a better idea – let everyone be registered, with their age, IQ, health, and so on recorded. Then let them be compared with millionaires. If you’re the same age as a millionaire, same IQ and same health status – you pay the same taxes he pays.
The fact that wealthy people can avoid taxes while others suffer under their burden is a grave matter of justice in many places in this country. In my state, the local property taxes are rising so fast that mine have tripled in the last ten years. What used to be a fair evaluation of things has become a heavy burden, and I know that in just a few years, I will have no choice but to sell the home, and go elsewhere, since staying would be pretty much the same thing. Add other taxes into my equation and I think I am at well over the point of paying 50% of my income on various taxes. Many people, except those who qualify for elderly or diabled abatements are bearing the brunt of the “free spending” of those most fortunate,. Sadly, this free-spendingt always seems to include money forced by taxation from others who may not have the money, but by virtue of their minority vote, have no choice. This theory moves all the way up the food chain to most taxes in this country, which are not proportionate at all. The rich pay a much, much smaller proportion of their income on taxes than the poor, and this is cruel and unfair. I think a flat ax on income would be the best thing- no loopholes for anybody, particularly those who are entrusted to make the laws.iserve said:
PS I have worked for a charity for many years, and you cannot imagine the abuses in the use of donated money and goods. I wouldn’t mind seeing something happen that might force better accountability there, as well.
