Fails to address the point, most specifically YOUR OWN regular and habitual "sucking at the public tit".
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.
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.
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.
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?
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.
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.
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.
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.
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.
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?
eace
From way back there in Post-1581...
The current $5 million exemption isn't going to stand the test of time and neither is a rate of less than 50%. My spouse and I each give to our two children and their spouses $12,500 per year. That's a way to drain at least $100K per year out of our eventual estate, thereby assuring that it will not be subject to tax on any level. It won't answer all our estate tax problems but it's one part of an overall approach.
Might be able to do better than a simple number. How about the exclusion equals fifty times the previous year's median household income? Give old Richie Rich a stake in how the middle class is faring for a change.
"The end of the world" is completely irrelevant. It's about what is morally the right thing to do. Taking away over 50% of a billionaire is not the end of the world to his children but it is, at least in my opinion, not the right thing to do.
Thanks, and thank you for staying calm while trying to convince me. That's a rare thing in political debates on the Internet.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.
History of Estate Tax Rates
Estate tax rates through history to provide some perspective on how low the rate is as compared with most of its history.
"As of today in 2010 the estate tax is repealed for this year. The exact nature of the estate tax in 2011 and later is currently being debated. Below I look at the history of the estate tax from 2009 and before."
"Here isa graph showing the top estate tax rate from 1916 to 2009."
"As you can see the top rate rose from 1916 to 1940's. From 1941 to 1976 the top rate was 77%. Since the 1970's the top rate has been dropping. Note that this is the TOP rate and did not apply to the entire estate."
"There is an exemption for the estate tax and estates do not owe any tax on amounts below the exemption. The Exemption has gone up over the years." "Heres a graph of the exemption / personal income":
History of Estate Tax Rates | Free By 50