Dude, get your facts straight. It appears like you formulate crazy hypotheses and then google for research that supports it.
Here is the estate tax rate...
- all estate value up to 750K is exempt (this figure might be off slightly as it goes up every year)
- after the exemption, the tax rate rises from 37% to 55% as the estate value grows. I believe the 55% figure kicks in at 3 Million.
I believe the inome tax started under Lincoln at 1% to pay for the civil war. By the time WWII rolled around it had risen dramatically due to many factors: Roads, Social Security, Defense (taxes went up during WWII to pay for the war). In fact I believe that Bush's tax cuts were the first time in the history of any nation OF ALL TIME when taxes were cut in a time of war...but that is another discussion.
Regarding the so called "death tax" (I gotta hand it to them -- they came up with a good name to get everybody all worked up), I believe that the estate tax only applies to those estates valued in excess of $4 million (I think -- anyway, whatever it is, it's a lot of money) -- so it is only the EXTREMELY affluent who are effected by this tax.
Also, I am pretty sure that taxes have actually been decreasing for the vast majority of Americans since the 70s. What's more, even when our taxes were at their highest, they were still lower than almost all of the industrialized nations on the globe. So why is everybody complaining so much about taxes?
I understand everybody's yearning for low taxes and more money in thier pockets. I yearn for that too. However, I firmly believe that life will be like a third world nation if we keep heading in the direction we are now. Our roads, subways, electricity, gas, public transportation, water, education, police, fire departments would all be affected. There will be a whole lot more poor people and a ton of crime (like Argentina). How would all the laborers even get to work without roads or public transportation? That would then affect all of our ability to earn a good income and have a good standard of living. I do not think any of us wants that (except for maybe a few really greedy SOBs).
So you see all this money that goes to build this entire infrastructure and educate people and protect us from crime and invaders and on and on and on all contributes to your company's ability to produce what it produces and therefore give you all well paying Jobs.
So when you say it is "my money not the governments" that is not entirely true. The Government hopefully is giving you and your company the climate, environment and circumstances that allow you and it to do what it does: helps get people to work, make sure you have electricity, employees who people who can read & write & add & substract, clean water water, police, etc . Make sense?
So I say we all need to take a step back and look at this issue a little more objectively and not let our emotions and our ideological dogma run away with us. Fair enough?
Thoughts?
Actually the first and largest tax cut was done done by John F. Kennedy. Next was Reagan and the smallest was GW Bush. Most of which went to the lower and middle class.
Estate taxes are also hit small business very.
And small business are hit hard with a progressive tax rate. A flat tax like the one Clinton placed on gas would be better for funding the government.
First of all, I am not an accountant or tax attorney. I have had a little experience with probate issues so I find the death tax issue very relavent.
Just a couple of examples of how WRONG you are about $4 Million being only applicable to the EXTREMELY affluent. I like the way you capitalize "extremely" to show that this could only be a select handful of people like the Bushes, Kennedys, et al.
If the threshold is $4 million, than this has been changed (thank God!) since the late 80's. A little over a decade ago, I know that inheritance could be passed down to the next generation below $600K, per parent, to children. After that, it was then taxed at a rate of at least 50%. Costs of probate could not come of the top as value of assets were established at the time of death and the timeframe for payment to the IRS was usually prior to estates being settled. For many, this cost could exceed $50K in legal and accounting services.
In the case of a family farm, there might be loopholes or exemptions that apply, but if not, a medium size family farm would have to be liquidated to pay the DEATH tax on that farm. Not only would this asset be forced to a sale (or refinance and subjected to a mortgage if the children have the capability)but it would possibly be forced to fire sale in a market that could be down because of market prices for land and/or crops.
Another great example would be a family resort. A 15-20 cabin resort in the vacation area of Minnesota might bring in revenue of only $150-200K over a season with the family squeaking $30-35K out of it to live on, but they enjoy providing a vacation experience to other people. If the owners die, the value is set which could easily exceed the $4 million because of how land values have skyrocketed in the area. Now their kids are forced into the same situation as the farm family. Sell their resort to pay for the taxes on the damn thing. The only way around it; pay large amounts of after tax dollars insurance.
Should that be the result of a productive life? Turn the value over to the government so they can inefficiently piss it away?
Yes we need roads, schools, fire departments, cops, etc. but when I witness what local, state & federal gov does with the money, I don't see it as a prudent investment. I see inneficient, wasteful spending. However, if you are pleased to let the gov take what they decide they need every year to provide the services they feel we need, you are allowed by law to donate whatever extra money you want to the IRS.
So we play with the totals- allow for payments over time, other ways to make it happen- NOT GET RID OF THE TAX ENTIRELY
Must have been hard for your kids- climbing out of the sewer after everybath! (Note M. La Humour challenged- even you must have heard of the phrase throwing the baby out with the bathwater)
There are ways of retaining the good points of this tax and softening the bad ones without getting rid of a good way of re-distributing wealth. After all, the rich get many more benefits than the poor from government stability.
businesses and farms. The difference is that congressional republicans wanted to completely eliminate the tax, while democrats thought that the tax should remain for "personal" holdings (not farms or other famlily businesses) over 4 million dollars. This means even personal assets valued at 3.9 million dollars would transfer tax free. Democrats thought that dead rich guys could contribute back to society (for things like the war) and lessen the burden on the living. By completely eliminating the tax under the republican plan, we're really just making rich trust fund babies richer...
http://www.twincities.com/mld/twincities/news/nation/4134369.htm?1c
this is from the "conservative " newspaper of the twin cities.
If you and the wife die together in a plane crash. Otherwise you get $600,000. A widow with her paid off home in Minneapolis and a lake cabin can easily have the estate tax kick in.
The bigger issue is why should the Govt tax your family just because you die? You paid taxes on the money when you made it, you paid taxes on the property while you own it and you pay taxes on any investment income you make. Then you die and your family has to pay more taxes and fees???
The Death Tax may have made sense when Rockefeller owned 10% of the US economy (of course they have trusts and don't pay estate taxes) but it makes no sense now when the richest man in the world controls less that .2% of the US economy.
Oh and we pay more OVERALL taxes and fees than ever. Tabs, sales tax, property tax, etc. Add them all up and we are way over taxed for the crappy govt. we have.
I like the example of a family resort - but that still sounds like you are super wealthy to probbably most Americans.
A like example would be in places where the primary residense has risen simularly. Is it fair to a family in say San Fran, or LA, (you pick the town) where an older couple has worked & scrimped & saved their entire lives to pay for their home and it's their primary asset - they have little else to leave to their kids. Now through no fault of their own the area becomes desireable & is a teardown neiberhood where people buy the house not for the house, but for the land & build a mini-mansion.
Is it fair to the kids to have them surrender that gain to the government? I think not.
At the end of the day, that income is taxed several times, once when the person earns it, another time while they pay various property taxes, and yet again when they die.
Who's money is it? Is it the Government's? or does it belong to the family?
... Anybody with a $4m estate, a halfway competent lawyer & the brains to do a little planning could avoid estate taxes.
They don't close down farms or businesses (don't tell me your "stories", they are not relevent). And anyway, farmers have sucked off the public teat for years. Fuck 'um. Anybody with a small business and a reasonable accountant knows how to make most of his life a business expense. Fuck 'um. (Includes me).
just goes out the window for the left when someone is rich!
Would you take 50% of the assets of a man who made 30K a year and left 100K to his kids, HELL NO, the left would say, that wouldn't be fair
But let a guy work his ass of, make something of himself and when he dies the governments present to the Kids is a big FU. Yes, your dad was an industrious and successful man who supplied employment for many others, here's our thanks, FU!!
Just because someone is rich, doesn't make it fair. And the reason "death tax" stuck so well is because that is exactly what it is.
Hey DNC, here's a clue for you...
"From each according to his gifts, to each according to his needs"...Vladimir Lenin
The approach you want to take has already been tried, it sucked!!
First of all it is not 50%. And I was mistaken on my original post -- the tax starts at estates valued at over $10 million (see link). It starts at 18% for estates starting at $10 million and goes up to 50% for estates valued at $160 million or more.
http://www.banksite.com/calc/estate
We are not advocating Communism. Why does it have to be one extreme or the other? For the record, we tried it your way too and that does not work either.
I lot of people work their ass off and they are not all rich -- most are not. Does working their ass off qualify them for something? Some people are gifted, yes. Others have more opportunities, others are just plain lucky. Some are not gifted, others do not have many opportunities and some are just plain unlucky. I've known people in all these situations. I'm sure you have too. It is all not as simple as you say (or as Lenin said for that matter). We have to make a more concerted effort at making things fair for all. Simply clinging to an ideology regardless of what works and what doesn't or what's fair to the top but screwed for the bottom is not going to solve our significant and growing problems.
Let me turn it around on you: Is it fair that one kid can be born into a rich family, not have to work hard in school, not have to work hard after school and gets it all handed to them on a silver platter? Is that fair? That is what I mean by some people are just plain lucky. And, don't worry, these children will still be extremely rich after they pay back to society for helping his father earn all that $$$$$$$$$$ and which this very lucky child did NOTHING to earn.
Dude, get your facts straight. It appears like you formulate crazy hypotheses and then google for research that supports it.
Here is the estate tax rate...
- all estate value up to 750K is exempt (this figure might be off slightly as it goes up every year)
- after the exemption, the tax rate rises from 37% to 55% as the estate value grows. I believe the 55% figure kicks in at 3 Million.
This is never going to work.
We tax our people LESS than the European countries tax their citizens and yet WE have a higher standard of living. Kind of disproves that "tax until equality is achieved" theory.
It is FAIR that a peson can accumulate wealth to assure for the care of their offspring after they die. It has nothing to do with the "luck" of the kid, it has to do with the planning of tha parents.
BTW, your tax figues here are WAY OFF, just like the rest of your theories
I never said solve all inequities through taxation.
I just believe that we should try to fix some (not all) of these ineqities through taxation. What I am hearing from you and others is that there should be no taxes are almost no taxes. I say this will end up redistributing wealth back to the few at the very top and leave most everybody else at the bottom. Our quality of life and overall standard of living will go way down (except for those very few).
Look, I make real good $$$. Believe me, it is great to have more of it. However, I think we can have taxes that do provide an overall benefit to the society and make my life better as a result.
history has taught us that making inheritance the main way wealth is transferred- as it was for about 3000 years is not as strong as making each generation make its own way.
But keep your silver spoon dream.
You assume that everyone starts off on a level playing field, which is certainly not true. Our society rewards good business men financially. Good teachers, plumbers, cops, and janitors are not rewarded financially. This isn't to say they cannot make a decent living, but they are unlikely to become millionaires from their salaries from working. But doesn't society need these people just as much as the business men??? So, since we are in a system that rewards business men more than others, can't they contribute back to the society that rewards them over others? And while I know conservatives always like to look at the self-made man and say "if he can do it, so can everyone else." This is a lie, because not all of us necessarily have good business acumen. The fact is, we all can't be CEO's. Someone has to clean the toilets and teach our kids, so in this sense we can't all "make it." If we all started out equally, you'd have a point, but when a rich guys leaves millions of dollars to their kids, those kids have an advantage that is not tied to their "gifts", as your quote says. The simple fact is, is that statistically, VERY FEW people in this country change social class during their life time. I'm not saying that we need to 100% redistribute wealth when a rich guy dies, but you must understand that we are in an economic system that already transfers wealth NOT acording to ones gifts.
OK, I think I understand what you're saying: Not all people are born equal: some can't be CEOs due to lower intelligence, ambition, luck, etc. During their life, capitalism can't fully prop up these people. But, if we give those with the good gene pool the advantage of capital (thru inheritance), it will make matters even worse. So, we need to re-distribute the capital upon generational change (death) to give the lower gene pool a chance.
I'm sorry if I offended you, Mr. Hernstein. The Bell Curve was a terrific book. But, I suggest you read Guns, Germs and Steel as well.
But it isn't being re-distributed to the less privileged, it goes directly to the government which spends it on wars for Israel and grants to Israel, services for new illegal arrivals, ect...
It is the wealthy who are buying up America by buying bonds.
Not that steroid taking freak in San Francisco, but government bonds which basically sell a piece of the country to the fatcat with the $10 million dollar income and $0 tax bill.
So, are you saying we should eliminate the tax exemption for governemnt bonds? Or only allowing poor people (or foreigners) to buy them?
I never said anything about "gene pools". And I never said that CEO's are more intelligent. In many cases I think the opposite can be said, but it depends on your definition of "intelligence". I also did not say that capitalism needs to "prop up" teachers and janitors (non-CEO's). You've added words to my post that simply were not there. My post was a critique of societies current ways of redistributing wealth, not a critique of people that aren't CEO's.
What you still seem to be missing is that we are always in a state of wealth redistribution. We take it from rich dead people and give it to their kids. The kids didn't work for it....plain and simple. You also don't really seem to address the fact that the estate/"death" tax in reality only applied to very few, very wealthy people. I'm sorry if I don't feel bad for trust fund babies that have to pay a tax on the millions of dollars they inheiret when their parents die.