The Punning Pundit

"So why get bent out of shape over this one type of tax? It isn't like anyone earns the money they receive when relatives die. I dunno. This whole issue seems like a no brainer..."

Andrew,

Come on man your killing me. It's not a no brainer for the simple fact is the people who died paid taxes their whole life and why should their families be taxed just to inherit their land or things? That's a double tax if I have ever heard one. I think this topic is a lot more deeper if you look into it rather than calling it a no brainer.

The death tax should be no more and it's just a stupid tax for the government to collect as much money as they can. So your telling me that if a persons parents (18 or older) parents die and they inherit a house. They should have to pay taxes on it? But if they can't pay the tax, they loose the house or have to sell it? Come on, use your head, that's just plain wrong?

Look deeper and you will see how stupid and uncalled for the tax really is.

Mike

Something for nothing, eh Mike?
That's what the argument you are making really is. If my Dad dies tomorrow (gods forbid!) and he leaves me everything, what part of it will I have earned? None of it. I simply will have had the good fortune to have my father drop dead…

The part that really gets me is that the threshold before penny 1 is taxable is US$1,000,000. In your example; that house has to be worth a lot of money before the kid is stuck with a tax bill. I want to know how Mom and Dad earned enough money for a million dollar house without understanding all the nifty ways they can shelter the money for their child…

What you are saying is that rich people should be able to allow their children to also be rich, regardless of whether their child can actually earn a living. I don't know about you, but I don't want to have more Kennedys running around…

Man, any tax is bad. In India we do not even have sales tax. SWEET!!!!
In India you do have to pay a penny as tax till you are 18. I should be in Middle East Asia. In Middle East Asia, you do not have to pay tax ever. Nice. What you earn is all yours…….

Of course, since you get what you pay for, India lacks a court system that is anything like workable. Don't get me wrong. India's court system is there, and is fundamentally sound, but is so underfunded that not nearly enough can get done…

It does not matter if you earn it or not…the bottom line is your father earned what he bought and was already taxed on it for as many years as he worked and owned a house or whatever. Regardless if the tax kicks in at a million dollars or 100 dollars, it shouldn't even be there in the first place for the simple fact the government already collected taxes from the recently deceased. My point is it's a double whammy for everyone when it comes time to collecting the tax.

I am making the argument for the average middle class citizens/or the poor in some cases, not the rich! I think you have mistaken.

Sure there are ways that people can shelter money to their child, but people shouldn't have to do it. If anyone is left something in a will, it should be free—like me giving you a 100 bucks, are you taxed on it? No! It's the same thing as a parent giving you a house or car, you are not taxed on it while you are alive, why should you be taxed when they die?

I love Mike's arguments-- it sounds a lot like "double taxation of dividends". It is, of course, utter hogwash. But I guess Mike must be counting on a big inheritance-- so good for you!

Of course, Mike, I suppose you rely on some government services (such as, oh, national defense) to a similar degree to the rest of us. Six words: THE GOVERNMENT HAS TO BE FUNDED. A system that taxes inheritances to non-spouses starting at dollar a million and one (of even at dollar 600,001, as it was recently) is not something that normal people should get the least bit upset about.

No one is stopping anyone from giving money to their children WHILE THEY ARE ALIVE, or giving money to charity, or doing anything the hell they want to with their property or their money. (note: spousal exemption was and is UNLIMITED; so much for the widows).

What we have is a tax that generates maybe 1/2 to 1% of the federal revenue (though a lot more in many states, like Florida) that is only paid by an extremely tiny fraction of people: very few people leave an estate anywhere near the million dollar range-- perhaps a few thousand nationwide each year.

Further-- as noted above, through proper planning, the damned tax can be minimized. Can a wage earner do that? Not bloody likely.

Its a tax that only affects extremely rich people who couldn't be bothered to do decent tax planning. I can't think of a BETTER OR FAIRER tax. Too bad we have a Congress and President who aren't interested in either fairness or in funding the government.

What I've never understood is why they call it "Double Taxation", because when you really stop to think about it, every dollar is taxed many times as it wends its way from pocket to pocket. Taxes are withheld before the paycheck is ever given to the worker; then in many states that same money will be taxed again when the worker uses it to buy stuff; then when that money goes into the merchant's coffers and gets paid out again to the merchant's employees, it's taxed yet again. And so on and so forth. To call this "double taxation" is a misnomer, because we really don't tax MONEY, we tax PEOPLE. So just because the dead person paid tax on the money originally (and actually, this is by no means a lock) means squat, in my mind, to the person now receiving the money.

My belief is this: if we're going to have taxes, and we have to have them (or we can just padlock the schools and libraries and parks and firehouses and police stations and live in Liberatopia, the Warm-n-Fuzzy Land of Libertarians), then the only way to work it is for people to pay tax whenever they make money. To set up special circumstances under which money changing hands one way is taxed, but another way isn't, makes absolutely no sense to me.

And the appeals to "Why should I work my entire life to leave something for my kids only to see it taxed away" don't make sense to me, either. First, I'll be dead. Second, I hope my kids can make their own way. Third, if I decide to leave it all to the North Kalamazoo Cat Hospital instead of my kids, I suspect no one will give a shit if it's taxed or not. And fourth, inheritance taxes are a good way of avoiding European style aristocracies that can REALLY be a pain-in-the-ass.

One thing to keep in mind is that that tax is the main reason why family-owned businesses sell out to corporations. The comments about hitting only the rich gloss over the fact that it is common for people to have ASSETS worth many millions of dollars, and not be rich.

Family farms are usually in that situation.

Despite the philosophical resistance to fact and logic inherent in conservative ideology, here goes:

1. Estate tax is not double taxation. Estates comprise what's left after earners have been taxed; estates comprise net earnings and therefore have never been remitted to government agencies. And since the person inheriting the loot never paid a dime on any of the original income, the double taxation argument is doubly stupid.

2. Estate taxes affect that tiny percentage of Americans who can most afford it. It is found money, in a sense, and if you don't get to keep every penny of it, boo hoo. And yes, I stand to pay estate taxes myself. I can live with it.

3. Wealthy citizens have an obligation AS citizens to care about the less fortunate denizens of the US. This society provides some of us with the opportunity to prosper, and we shouldn't be so small about sharing some our good fortune.

"Promote the general welfare:" That phrase ring a bell with any of you astute students of American governance?