View Poll Results: which best describes your view of the inheritance tax?

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  • There should be no inheritance tax of any amount of money or assets.

    84 54.90%
  • The first 5 million dollars should be exempt. After that the tax rate should be 35%.

    21 13.73%
  • The first 5 million dollars should be exempt. After that the tax rate should be 50%.

    12 7.84%
  • The first 1 million should be exempt. After that the rate should be 50%.

    19 12.42%
  • No exempt amount. Tax at 35% from the get-go.

    9 5.88%
  • No exempt amount. Tax at 50% from the get-go.

    1 0.65%
  • Abolish all inheritance. In other words, tax 100%.

    7 4.58%
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Thread: which best describes your view of the inheritance tax?

  1. #1581
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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by Tythor Zeth View Post
    Inheritance money has already been taxed as income and that is why I think it should not be taxed again if the owner passes away.
    Once again for the hard of hearing, the bulk of wealth within most estates that actually pay inheritance taxes is comprised of unrealized capital gains that have NEVER been taxed, and because these assets will be passed to heirs at their stepped-up basis, no tax will EVER be paid on such gains if they are not taxed at time of inheritance.

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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by Tythor Zeth View Post
    Inheritance is not paying it to anyone else, it's giving. If I would decide that I want to give my brother $1000, nothing will be taxed.
    Only because the tax rate on the first $13,000 of annual gifts from one donor to one recipent is 0%. If you gave your brother $15,000 in a year, you WOULD owe gift taxes on $2,000. Gift and inheritance taxes are actually the same thing.

    Quote Originally Posted by Tythor Zeth View Post
    But suddenly when I die the money somehow has to be taxed? It's a gift. Another example: imagine I told my brother that I was going to buy a car for him. If I would give my brother a new car of, let's say, $25.000, then the money would be taxed, right? After all, you're buying something so it should be taxed.
    You would of course pay all applicable sales taxes associated with purchasing the car to begin with, and you would then pay gift taxes on the $12,000 worth of car that is above and beyond the 0% gift tax bracket.

    Quote Originally Posted by Tythor Zeth View Post
    But what if I would die before I could buy him that car, and in my testament, it was clear that I wanted $25.000 of my savings to go to my brother. Then suddenly, it has to be taxed?
    Your estate will owe federal inheritance tax only to the extent that the value of the entire estate exceeds $5,120,000. State inheritance taxes may of course be a very different story. It matters where you reside when you die, so choose carefully.

  3. #1583
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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by Tythor Zeth View Post
    Because it isn't earned, it's a gift.
    Lottery winnings arent earned either. They are of course taxable.

    Quote Originally Posted by Tythor Zeth View Post
    So, according to you, I am allowed to buy a car for someone and get taxed only once but when I decide to give him the money to buy one himself instead, it suddenly has to get taxed twice?
    No, it's taxed twice either way. In one case, you pay sales taxes when you buy the car and then gift taxes when you give the car to your brother. In the other case, you pay gift taxes when you give the money to your brother, and he pays the sales taxes when he buys the car.

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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by TurtleDude View Post
    You are correct-income is not the same as a gift. There is no transaction involving an exchange for value with a bequeath.
    LOL! "Bequeath" is a verb. The availablke noun forms are bequeathal and bequeathment, but more populalry, bequest. And you claim to be a lawyer. Pfft! And what sort of import is being attached here to the presence or absence of a quid pro quo? Do you imagine there to be any?

    Quote Originally Posted by TurtleDude View Post
    It should not be taxed again.
    Yes, it should. Assuming that it actually has been taxed once -- often not the case -- there is no rule, policy, or even suggestion that money once taxed cannot or should not be taxed again. This is a non-existent argument that those with none other at hand are apt to turn to in hopes that it might sound sensible to untrained ears.

    Quote Originally Posted by TurtleDude View Post
    And in some cases, such as a grandparent dying and his child and spouse dying tragically shortly thereafter, the government gets two cuts at the same pool of money before it has a chance to regenerate.
    Aw, poor babies. You realize of course that it is only the excess over $5,120,000 that will be taxed either time? The median income is $32,000 or whatever and look who you're worried about.

    Quote Originally Posted by TurtleDude View Post
    its an evil tax and those who argue so vehemently for its continued existence you have to wonder about
    It is a necessary tax and you don't have to wonder at ll about those who oppose it -- they are ALL proponents of establishing a permanent and dominant wealth-and-power class in this country that is based NOT on talent, creativity, or productivity, but rather on mere bloodlines. They like the idea of an intergenerational wealthy, landed aristocracy that the huddled masses of everyone else can and must look up to. These people hate America and what it stands for. There's no mystery there at all.

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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by TurtleDude View Post
    We are talking about the death tax or as you like to charitably call it, the estate tax. There is no federal inheritance tax in the USA federally
    LOL! There is an inheritance tax at the federal level as well as provisions for taxation of assets passed from an estate to an heir via means other than inheritance that makes it the more broadly applicable estate tax.

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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by TurtleDude View Post
    Your posts demonstrate that you think the rich should pay higher and higher taxes on anything no matter what it is
    You've got the proper premise alright. All we are quibbling over here is the methodology for implementation. Effective tax rates on the rich have been declining for decades, but were still given a major kick downward by Bush's idiotic Tax Cuts for the Rich. Time's up. Party's over. The rich need to get back to paying more. How we go about doing that is an open discussion. THAT we go about doing it is closed.
    Last edited by Cardinal Fang; 02-25-12 at 02:23 PM.

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    Re: which best describes your view of the inheritance tax?

    The money someone earned has been taxed their entire life. I view an inheritance tax as a double tax upon wealth and it shouldn't be allowed. The government got their cut of someone's wealth while they earned it in life, they shouldn't tax it even more when the person passes away and leaves that money (that was already taxed) to someone else.
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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by Cardinal Fang View Post
    Only because the tax rate on the first $13,000 of annual gifts from one donor to one recipent is 0%. If you gave your brother $15,000 in a year, you WOULD owe gift taxes on $2,000. Gift and inheritance taxes are actually the same thing.


    You would of course pay all applicable sales taxes associated with purchasing the car to begin with, and you would then pay gift taxes on the $12,000 worth of car that is above and beyond the 0% gift tax bracket.


    Your estate will owe federal inheritance tax only to the extent that the value of the entire estate exceeds $5,120,000. State inheritance taxes may of course be a very different story. It matters where you reside when you die, so choose carefully.
    Quote Originally Posted by Cardinal Fang View Post
    Lottery winnings arent earned either. They are of course taxable.


    No, it's taxed twice either way. In one case, you pay sales taxes when you buy the car and then gift taxes when you give the car to your brother. In the other case, you pay gift taxes when you give the money to your brother, and he pays the sales taxes when he buys the car.
    Thanks for those clarifications.

    Quote Originally Posted by haymarket View Post
    Tythor - I have a question for you.

    Let us take three American citizens.

    case #1 is Ed Vogel, a professional athlete who makes $5 million dollars a year in wages. His official tax bracket is 35%. With no deductions, he will pay over $1,600,000 in federal income taxes.
    case #2 is Marcie Bundy, she does not work but gets all her income from long term capital gains. She made $5 million dollar this year in long term capital gains. Her tax bracket is 15% and she will pay $750,000 on that same five million that Ed Vogel paid over twice as much on.
    case #3 is Mike Shelby, he did not work not had any capital gains but he inherited $5 million from his deceased parent. He pays ZERO, NOTHING, not one thin dime on that amount.

    So we have three American citizens, all of which put five million new dolars into their pockets or accounts. It spends the same and looks the same and if nobody told you the source, nobody could tell you the difference if it were in three piles of 5 million dollars each.

    But because of preferential treatment and discriminatory laws, one pays nothing on that same five million, one pays out $750,000.00 and the third pays over twice that - assuming that all three have no deductions.

    Now here is my question Tythor - why should Ed Vogel, an American citizen and voter be willing to support what just happened to him? And why should every other of the scores of millions of Americans be willing to support such a system that favors others and not themselves?
    My theory was: because it is a gift, not income. The question that I was asking myself is: should gifts be exempted from taxes because they are gifts? My initial answer was yes. I gave it a lot of thought today and I came to the conclusion that it shouldn't be exempted. But at what amount of money should the inheritance tax start (if you do not agree with the "no exempt amount")? One could argue that inheritance should be taxed at the same amount a gift would be taxed: starting from $13.000, at a percentage of 35%. On the other side, if a gift would be split into several gifts once a year, one could avoid taxes if each smaller gift does not exceed $13.000, so should that affect the minimum amount of money needed for inheritance tax? What do you think?

  9. #1589
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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by Tythor Zeth View Post
    Thanks for those clarifications.


    My theory was: because it is a gift, not income. The question that I was asking myself is: should gifts be exempted from taxes because they are gifts? My initial answer was yes. I gave it a lot of thought today and I came to the conclusion that it shouldn't be exempted. But at what amount of money should the inheritance tax start (if you do not agree with the "no exempt amount")? One could argue that inheritance should be taxed at the same amount a gift would be taxed: starting from $13.000, at a percentage of 35%. On the other side, if a gift would be split into several gifts once a year, one could avoid taxes if each smaller gift does not exceed $13.000, so should that affect the minimum amount of money needed for inheritance tax? What do you think?
    First, my drink is raised to you in salute since it is rare indeed when anybody here admits they have thought about an issue and changed their mind.

    Second, My concern, and I suspect the concern of most, is not in taxing gifts - even a $13,000 gift - but taxing a true transfer of an estate. If somebody wants to go through the process of passing on ten grand every year from twenty years to their kid - that is something I am not going to squawk about too loudly. I can live with that.

    When it comes to actually inheritance of an estate - that money should be taxed as if it were any other sort of new income to the person getting it.
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    Re: which best describes your view of the inheritance tax?

    Quote Originally Posted by digsbe View Post
    The money someone earned has been taxed their entire life. I view an inheritance tax as a double tax upon wealth and it shouldn't be allowed. The government got their cut of someone's wealth while they earned it in life, they shouldn't tax it even more when the person passes away and leaves that money (that was already taxed) to someone else.
    From way back there in Post-1581...

    Once again for the hard of hearing, the bulk of wealth within most estates that actually pay inheritance taxes is comprised of unrealized capital gains that have NEVER been taxed, and because these assets will be passed to heirs at their stepped-up basis, no tax will EVER be paid on such gains if they are not taxed at time of inheritance.

    And of course, you'll not find a rule, law, or even suggestion anywhere that money once taxed cannot or should not be taxed again. Everything in fact is taxed over and over and over again. Odd that so many people haven't noticed this.
    Last edited by Cardinal Fang; 02-25-12 at 05:07 PM.

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