[jonottawa]

Well, it's December 31, 2009, so you all know what that means.

Yes, it's the day before uber rich people (well, Americans) can die and leave their vast wealth to their spawn tax free. (If massive inherited wealth doesn't make you all warm and tingly, well you're just not patriotic enough.)

Bet those life support machines are in short supply. I wonder if there will be a rash of murders/suicides (murders early in 2010 and suicides in December, presumably.)

[jdonn]

Ok I'll admit it, I don't understand...

[Hanoi5]

I understand if there is some kind of law in the US that will allow a tax free inheritance from someone dying on January 1st. Otherwise, OP is already intoxicated...with the holiday...

[Lobowolf]

jonottawa, on Dec 31 2009, 11:00 AM, said:

Well, it's December 31, 2009, so you all know what that means.

Yes, it's the day before uber rich people (well, Americans) can die and leave their vast wealth to their spawn tax free. (If massive inherited wealth doesn't make you all warm and tingly, well you're just not patriotic enough.)

Bet those life support machines are in short supply. I wonder if there will be a rash of murders/suicides (murders early in 2010 and suicides in December, presumably.)

You can do what you want with your money while you're alive, including giving to people whom you care about. Why on earth should the government be entitled to it, or a huge chunk of it, just because you died?

[jdonn]

Lobowolf, on Dec 31 2009, 12:38 PM, said:

jonottawa, on Dec 31 2009, 11:00 AM, said:

Well, it's December 31, 2009, so you all know what that means.

Yes, it's the day before uber rich people (well, Americans) can die and leave their vast wealth to their spawn tax free.  (If massive inherited wealth doesn't make you all warm and tingly, well you're just not patriotic enough.)

Bet those life support machines are in short supply.  I wonder if there will be a rash of murders/suicides (murders early in 2010 and suicides in December, presumably.)

You can do what you want with your money while you're alive, including giving to people whom you care about. Why on earth should the government be entitled to it, or a huge chunk of it, just because you died?

As weird as it sounds, I think it's good to create an incentive for people to not die.

[mike777]

Lobowolf, on Dec 31 2009, 12:38 PM, said:

jonottawa, on Dec 31 2009, 11:00 AM, said:

Well, it's December 31, 2009, so you all know what that means.

Yes, it's the day before uber rich people (well, Americans) can die and leave their vast wealth to their spawn tax free.  (If massive inherited wealth doesn't make you all warm and tingly, well you're just not patriotic enough.)

Bet those life support machines are in short supply.  I wonder if there will be a rash of murders/suicides (murders early in 2010 and suicides in December, presumably.)

You can do what you want with your money while you're alive, including giving to people whom you care about. Why on earth should the government be entitled to it, or a huge chunk of it, just because you died?

Keep in mind if you gift money, a gift tax must be paid. So the govt is entitled to its cut even if you are alive.

Estate taxes are just a form of the gift tax.


Of course you paid taxes if earned income and you pay taxes when you spend it also. Of course there may be a few other taxes along the way also.

[Lobowolf]

mike777, on Dec 31 2009, 02:29 PM, said:

Lobowolf, on Dec 31 2009, 12:38 PM, said:

jonottawa, on Dec 31 2009, 11:00 AM, said:

Well, it's December 31, 2009, so you all know what that means.

Yes, it's the day before uber rich people (well, Americans) can die and leave their vast wealth to their spawn tax free.  (If massive inherited wealth doesn't make you all warm and tingly, well you're just not patriotic enough.)

Bet those life support machines are in short supply.  I wonder if there will be a rash of murders/suicides (murders early in 2010 and suicides in December, presumably.)

You can do what you want with your money while you're alive, including giving to people whom you care about. Why on earth should the government be entitled to it, or a huge chunk of it, just because you died?

Keep in mind if you gift money, a gift tax must be paid. So the govt is entitled to its cut even if you are alive.

Estate taxes are just a form of the gift tax.


Of course you paid taxes if earned income and you pay taxes when you spend it also. Of course there may be a few other taxes along the way also.

True enough, but (as far as I remember from my Tax Law class), the gift tax is at a smaller rate, and comes with exemptions (amount, and form of gift, e.g. college tuition) that the estate tax doesn't have. So they're a nasty form of the gift tax.

[mike777]

These tax rates change all the time and can be very complicated.


I always thought one good way to raise alot of revenue for all kinds of stuff is to get rid of all of the exemptions and raise the rate to 60-80%.


That means give all you want to your wife, kids, charity , church, temple, red cross etc but tax it and tax it.

[blackshoe]

mike777, on Dec 31 2009, 02:29 PM, said:

So the govt is entitled to its cut even if you are alive.

I suppose it depends on the meaning of "entitled". As I understand the word, the government isn't "entitled" to squat — they just permit themselves to take whatever they like.

[nigel_k]

mike777, on Jan 1 2010, 07:29 AM, said:

Keep in mind if you gift money, a gift tax must be paid. So the govt is entitled to its cut even if you are alive.

Estate taxes are just a form of the gift tax.

Of course you paid taxes if earned income and you pay taxes when you spend it also. Of course there may be a few other taxes along the way also.

It's much easier to avoid the gift tax than the estate tax because you can give things other than cash or and it's very hard to detect.

Let's say A and B earn the same income all their lives and pay the same income taxes. A lives frugally and saves and invests so he can leave money to benefit his descendants when he's gone. B squanders all his money on booze or gambles it away. You should agree with the estate tax only if you're fine with the government imposing a much higher effective rate of tax on A compared to B.

[hotShot]

nigel_k, on Dec 31 2009, 09:53 PM, said:

Let's say A and B earn the same income all their lives and pay the same income taxes. A lives frugally and saves and invests so he can leave money to benefit his descendants when he's gone. B squanders all his money on booze or gambles it away. You should agree with the estate tax only if you're fine with the government imposing a much higher effective rate of tax on A compared to B.

Did you take into account that B paid a lot of VAT when he spend the money?

[nigel_k]

Maybe he spent it overseas or on things with no VAT? And if his descendants get the money and spend it they'll pay VAT anyway so it is a wash in that case.

Lest I be accused of ideological opposition to taxes (which would possibly be a true accusation), my main point is that a tax on income or consumption is much preferable to a tax on savings. There are economists all across the political spectrum who will agree with that.

[jdonn]

nigel_k, on Dec 31 2009, 04:10 PM, said:

Lest I be accused of ideological opposition to taxes (which would possibly be a true accusation), my main point is that a tax on income or consumption is much preferable to a tax on savings. There are economists all across the political spectrum who will agree with that.

Is inheritance not income for the person who receives it?

[Phil]

jdonn, on Dec 31 2009, 04:17 PM, said:

nigel_k, on Dec 31 2009, 04:10 PM, said:

Lest I be accused of ideological opposition to taxes (which would possibly be a true accusation), my main point is that a tax on income or consumption is much preferable to a tax on savings. There are economists all across the political spectrum who will agree with that.

Is inheritance not income for the person who receives it?

No.

[jdonn]

Phil, on Dec 31 2009, 06:02 PM, said:

jdonn, on Dec 31 2009, 04:17 PM, said:

nigel_k, on Dec 31 2009, 04:10 PM, said:

Lest I be accused of ideological opposition to taxes (which would possibly be a true accusation), my main point is that a tax on income or consumption is much preferable to a tax on savings. There are economists all across the political spectrum who will agree with that.

Is inheritance not income for the person who receives it?

No.

Well they didn't save it either...

[luke warm]

jdonn, on Dec 31 2009, 06:14 PM, said:

Phil, on Dec 31 2009, 06:02 PM, said:

jdonn, on Dec 31 2009, 04:17 PM, said:

nigel_k, on Dec 31 2009, 04:10 PM, said:

Lest I be accused of ideological opposition to taxes (which would possibly be a true accusation), my main point is that a tax on income or consumption is much preferable to a tax on savings. There are economists all across the political spectrum who will agree with that.

Is inheritance not income for the person who receives it?

No.

Well they didn't save it either...

but since it's not income, it shouldn't be subject to an income tax (imo)

[cherdanno]

Phil, on Dec 31 2009, 06:02 PM, said:

jdonn, on Dec 31 2009, 04:17 PM, said:

nigel_k, on Dec 31 2009, 04:10 PM, said:

Lest I be accused of ideological opposition to taxes (which would possibly be a true accusation), my main point is that a tax on income or consumption is much preferable to a tax on savings. There are economists all across the political spectrum who will agree with that.

Is inheritance not income for the person who receives it?

No.

How about a capital gain? (That's how it is getting taxed during the year 2010, I believe.)

[barmar]

The estate tax was originally intended to target only the very rich. So although it's a very nasty tax, few people were affected by it. The problem is that they didn't index it, and the popularity of mutual funds allowed more and more middle income people to invest well, so now many middle class taxpayers have found themselves with estates subject to the tax.

The other problem is that there are ways to get around the estate tax, by setting up trusts instead of just leaving the estate to your heirs. But these methods are typically only used by the very rich, so in the end it's just the moderately wealthy who end up paying most of the estate taxes.

[mikeh]

I get amused (or bemused) every time I read someone characterizing taxation as 'the government' taking money.

The government is 'us', folks...at least in a democracy. And 'we' have all kinds of services that we demand from ourselves.

We demand clean water, reasonably clean air, highways, airports, railways, electricity, hospitals, police, fire, social services, court systems, city and state maintenance workers, air traffic controllers, garbage and sewage disposal, education, parks, building codes, and on and on and on...

The exact mix that we demand from ourselves, in the form of government services, varies from country to country....but all societies that have governments provide some services to themselves, and these require money.

When we pay tax, we are contributing to the cost of our society...not paying some arms-length superimposed bogeyman.

If you are concerned about taxation, then get involved in the democratic process....anyone who sits on the sidelines and complains about 'them', in the form of government, without being politically active, doesn't deserve much attention, imo.

As for estate tax...why not? The heirs didn't earn one penny of the money being left to them....and that money was usually acquired by making use of the services provided by government...since we HAVE to have taxes....why not tax the dead? Would you rather pay more tax while alive?

[Winstonm]

Quote

why not tax the dead? Would you rather pay more tax while alive?

I can hear Monty Python now: "Wring out your dead."