Random Question: Do any other Dems agree that the Death Tax is unfair?

[Mike 03]

One issue I have wavered over is the estate tax (code name "death tax"). I see both pros and cons, but one thing I never hear discussed are the families that fall between being "poor" or "middle class" and those who are "rich" or "billionaires". You are either living in the projects or Warren Buffet.

I know from personal experience that there are many people who are neither poor nor rich, whose livelihood depends on the fertility of the land and who cannot withstand an estate tax that is more than fifty percent of that estate. I know it sounds ridiculous to say, for many people, but a million dollars is not really very much nowadays. It used to be. Ask your Congressperson if a million dollars is a lot of money and I am quite certain he/she will attempt any subterfuge necessary to plant the notion that earning a million is inconceivable. But it's not.

As Kurt Vonnegut used to say, "Think about it."

[msongs]

1. if DC dems had any brains they would call tax cut extensions the BIRTH tax but they dont lol nt

[Jackpine Radical]

6. That's a beautiful reframe.

Birth tax--I love it.

[DenverDad]

8. In my opinion

50% inheritance tax may be excessive. In many cases haven't the inherited funds already been taxed at some point?

[Hassin Bin Sober]

17. I suppose I could make the same argument about my wages.

My customers already paid taxes on the dough they forked over to me. Why should it be taxed again?

I mean, why shouldn't I be entitled to an income tax free existence like the Paris Hiltons of the world?

Tax money ONCE I say! Let the first person who earns it pay taxes on it and keep those grubby gubmint hands off it from there on!!

[DenverDad]

22. Good points!

[BzaDem]

2. Um, the estate tax only covers millionaire estates. After this deal, it won't affect anyone below 5

million for 2 years. The estate tax is entirely fair.

[Tx4obama]

3. The first 5 million will be exempt, then 35% tax after that. n/t

[SoCalNative]

4. I thought according to the deal made yesterday

the tax was only to be imposed at 35% for estates over $5 million?

[Duer 157099]

5. Income is income. Why should income derived from inheritance be exempt?

'splain cuz I don't get it.

[northoftheborder]

7. because it is unearned by the person who inherits it

[Orrex]

14. So is pretty much all dividend and capital gains income

[SmileyRose]

18. and is usually not taxed when it was earned by the deceased

nearly always the inheritance was earned on capital gains, which is not taxed unless it is sold or otherwise liquidated. The inheritance tax (aka death tax) is in place of the capital gains taxes that would be paid if the asset were liquidated.

The first 5 million is exempt so that those inheriting a small business aren't forced to sell it off to pay the taxes. Supposedly less than 2% of family businesses come anywhere close to that value and the taxes are paid only on the portion of the business over 5 million - which can be paid out over time so that the business does not have to broken up.

[Duer 157099]

27. Exactly. It should be taxed at DOUBLE the rate then.

Makes no sense to punish those who actually "earn" their money honestly!

[Lord Magus]

43. All the more reason to tax it heavily.

If any income is to be taxed at a preferential rate, it should be income that's actually earned by working class Americans.

[PDJane]

9. It's an estate tax, and it's more the Paris Hilton Tax

than it is for anything else.

[TexasObserver]

10. I don't think it should apply to estates under $20 million.

It serves a purpose for estates of great value, but $20 million isn't that high, IMO.

Family businesses can have that kind of value, and it's a nightmare for families when a key owner dies.

I don't care for the pejorative "death tax," but the estate tax is a bit much. When you die the government should get a cut? Really? I think that's offensive, but accept the estate tax in theory as a device to help avoid huge concentrations of wealth.

The truth is the estate tax creates jobs for lawyers, accountants, and bank officers, and does little else besides make sure that wealth gets distributed according to a plan dreamed up in Washington.

[Hassin Bin Sober]

26. The tax isn't when you die, it's before you inherit.

You say you don't care for the term "death tax" yet you call in to the republican trap and claim the tax is on the dead person.

Why should the beneficiary of $19 million dollars be allowed to skate free for life and never pay a dime in income tax?

If the family has a NET $19 million dollar value asset, they can either borrow the money to pay the tax or sell the asset to someone who will put the asset to work.

[TexasObserver]

49. The money has already been through the tax mill once.

It's after tax dollars being inherited.

You think inheritance is a good reason to tax. I don't, and my basis is it's already been through the tax mill.

I considered your point of view the first time over 30 years ago, and have rejected it consistently since.

[Hassin Bin Sober]

50. All money goes through the tax mill several times before it goes to money heaven.

That's how our system works.

I seem to remember a number like 7 or 8 as the multiplier.

I could say the same thing about the money my customers pay to me. I mean, they paid taxes on it so why should I have to pay taxes? After all, I receive after tax revenue.

You may have rejected that point of view but my way is the way our system is SUPPOSED to work. Your way will eventually concentrate all wealth at the top and create two classes of people - serfs and owners.

I really can't believe I'm having this discussion on a Democratic site. Did you SEE Bernie Sanders' speech from the other day (posted in the video section)? The horrendous tax policies of the last 30 years are what LED us in to the mess we are in now. These policies are what helped increase the concentration of wealth of the top 1% of earners from eight percent in the 70s to twenty three percent presently.

Furthermore, the entire "Death Tax" bullshit is an issue invented, bought, and paid for by a handful of super wealthy families, Grover Norquist and their useful suckers on the right who think, if they just TRY really hard, they too can inherit a billion dollars.

Meanwhile, the Walton family will laugh all the way to the bank with the 30 billion they stand to keep. Nice work if you can get it. It's not like they single handedly destroyed communities, made it so their employees are top recipients of public aid in several states or worked to become China's largest customers surpassing all other countries. All while benefiting from near zero tariffs, state and local government subsidies and federal tax codes that tax them at lower rates than their welfare collecting cashiers.

No. The Walton heirs should keep all that money they squeezed - fair and square!!

Read this paper:

Spending Millions to Save Billions
Eighteen super-rich families have spent millions over the years to kill the estate tax. Doing so would net them billions of dollars.

http://www.faireconomy.org/files/pdf/millions_billions.pdf

[Yupster]

51. People say it's on the dead person because

then they can say it only effects the top 2 %.

If it's on the beneficiaries, then it effects a much higher percentage.

My own family is an example.

My aunt died when the estate tax was on everything over $ 600,000 which is what it was forever until Bush changed it.

My aunt never married, lived upstairs in our two family home in New York City and had a good job. She died with about $ 1.8 million in assets, a good chunk of it her home.

We ended up paying something like $ 200,000 in estate taxes.

My aunt didn't pay it. She had died.

I paid it by getting less than my aunt wanted me to have. The same for my brother, sister, mother, father, cousins, the dog rescue, the church, the World Wildlife Fund, the adoption place for retired greyhound racing dogs, etc. The tax effected many more people than my aunt.

Personally I am happy with a $ 5 million compromise. That will cover most regular people who did well, own an expensive home or a small business. Coincidentally, about five years ago I called Senator Nelson's office in Nebraska when the Repubs still had the sentae and wanted to make the cuts permanent. I aksed what would finally happen with the estate tax, and they told me not to worry. A compromise would be passed around $ 5 million. Took longer than they thought, but he was exactly right.

A reasonable level I think.

[Hassin Bin Sober]

54. It's a whole hell of a lot less than 2%.

You seem to be confusing the top wage earners (2%) with the number of estates that are affected by the estate tax - .3% I doubt, even with heirs, the actual affected population even approaches 1%

I don't have any problem with an exemption up to a certain number. I think 5 million is a little high but it isn't the end of the world. I think 3 million would be more like it.

I don't even have a problem with long-held real-estate being exempted at a higher rate. I mean 20-30 plus years held real-estate and not some late in life tax shelter purchased for the purposes of evading estate taxes.

I feel bad for you that and your relatives actually had to pay taxes on your UNEARNED 1.6 million dollar income. But I think you should be happy with the money you received TAX FREE. 99.7% of the population will never earn a dime their income tax-free. BTW, she could have given ALL her money to the church and dog rescue and avoided all those nasty taxes.

Anyway, while you and I are haggling over a million bucks, the Waltons and Kochs are trying to run off with billions. The Walton family alone stands to gain something like 30 billion.

A good read:

Spending Millions To Save Billions.

http://www.faireconomy.org/news/spending_millions_to_save_billions

[DeadEyeDyck]

11. Do any other Dems agree that the Death Tax is unfair?

Now that I think about it, once a person is dead, they should not have to pay taxes. I mean, they sad Death and Taxes but I never thought it meant at the same time. So, if I am dead and forget to send in my taxes, will I be dug up and audited? After watching the "Walking Dead", I don't doubt anything anymore.

[Hassin Bin Sober]

29. Dead people still have to file tax returns - well their heirs file.

I know. I just did it for my dad.

Besides, the dead people don't pay the tax. The money gets skimmed off the top before the heirs get paid. You know, kinda like yours and my wages.

See how that works? Everybody pays the freight. Well, you and I don't get the first $5 million of OUR income tax-free like winners of the sperm lottery do.

[Spider Jerusalem]

12. No, it's not unfair.

I have no issue with taxing estates above a certain threshold. There are also already existing small business and family farm exemptions. Also it applies to the value of a personal estate; incorporate and move business assets to the corporation, it's not part of a personal estate. Problem solved.

The people who think this is an issue are generally ignorant of the relevant tax laws or presume the people they're trying to convince are. I also find that people who call the estate tax the "death tax" tend to be the same nimrods who think that chucking progressive income tax in favour of a flat-rate comsumption tax is both a good and fair idea.

[dipsydoodle]

13. We're used to it in the UK

Death duties its called. I can't remember the starting point - about £300,000 I think. There are apparently various ways around it using trust funds and /or moving ownership over to children well before likely death age. My mother made me laugh when she told me I'd been owner for some years along with my siblings of both her properties and I should not consider charging her rent. :rofl:

The issue is alleged to be mainly to do with capital gains on properties which have never been taxed.

[frazzled]

15. It's an Estate Tax, so don't use Republican lingo

It's for transfer of assets from one generation to the next, and affects a relatively small portion of individuals. In America, we don't want inherited wealth to create even more inequality. I would like to have seen this tax -- which we currently do not have (it elapsed in 2010 and was set to revert to 1991 rates on January 1)-- set higher. But I am not economist and do not know what the implications in this fragile economy might be. I am also not a politician, but my good guess is that the Republicans, come January 1, would try to do away with it altogether. However, the 35% rate on estates valued over $5 million -- which is extremely generous -- will last only for two years. It is not permanent. I hope we can revisit this and raise it to appropriate rates. A lot of that $5 million estate is going to be deductible anyway.

[Igel]

41. It doesn't do the trick.

The people who leave vast fortunes to their kids tend to put them in trusts. Then they bypass, as my parents' 1998 trust put it, the "death taxes". Think Kennedys, Heinzes, etc. Some are liberals some are conservatives. No matter, the trust just keeps on growing and growing and growing.

My parents, of course, had no vast fortunes. Nor does their trust keep on growing.

Fortunes not put into trusts and which are therefore protected from the kids' rapaciousness tend to be squandered fairly quickly. It's why my brother, with a few million, has made it clear that in the event of his death the trust that he's put his money in will be inaccessible to his kid until the kid's 25 or 30--and then it has conditions on the kid's ability to withdraw money or be able to borrow against it. I actually think that the trust is set up so if the kid's impoverished and homeless he can't get a cent out of it. Sort of a "make work pay" attitude.

[moose65]

16. Why is it unfair, though?

For one thing, we should stop calling it the "Death Tax." That's Republican branding. If you're dead, you won't care about ANY of your money that you leave behind. A husband can leave his wife everything without estate tax, and vice-versa. It is assumed that both spouses contributed to the earning of all that money, which is as it should be. Why shouldn't the heir pay tax if they suddenly receive a huge income from an inheritance that they probably contributed very little to? The person who's dying isn't being taxed - the person receiving the money is.

That being said, it is certainly possible that many middle-class couples can amass a million-dollar estate in their lifetimes. The debate should be focused on how much the exemption should be. If not a million, then what? 2 million? 2.5? Or how about a progressive estate tax? People who inherit over 10 million dollars should certainly be taxed at the 55% rate. The purpose of the estate tax is to prevent a wealthy aristocracy.

[last_texas_dem]

19. I don't think it's unfair in principle

I do think it's necessary to make adjustments regarding where it kicks in, due to inflation and whatnot, but the $5 million starting point under the Bush rates seems reasonable, if not high, in this non-expert's eyes. Also, it does bother me that there is a substantial faction in Congress to whom the estates of the rich are apparently more valuable than unemployment benefits for the jobless; it's just difficult for me to see how an estate tax cut extension was apparently considered necessary as part of making this deal.

In my experience, it seems like the majority of the "folks" Repugs and conservative interest groups tout as being unfairly damaged by the estate tax are either completely mythical or very few and far between. Kind of like how, to hear them spin it, every small business in the U. S. was going to be destroyed if the Bush tax cuts weren't extended.

[snot]

20. Nope.

[cali]

21. Absolutely not.

And people like bill gates sr and warren buffett don't either. And sorry, I know lots of folks who make their living off the land and they won't be negatively impacted. We are, after all, talking about 5 million for a single person and 10 million for a couple.

[left is right]

23. I have to pay taxes on the interest my pitiful savings account garners

Most years I end up transferring what ever is in my savings just to make ends meet long before interest is paid. but I do remember one year when I owed $4 or $5 on the interest.
I mention this because the repukes always say the estate tax is double taxation but they don’t care about the double taxation on my pitiful savings account when it is charged for whatever after tax salary that I manage to save.
The estate tax is fine with me. the heirs of a rich deadman did nothing to earn that money why shouldn’t they have to pay a tax upon it?

[Hassin Bin Sober]

32. "the heirs of a rich deadman did nothing to earn that money why shouldn't’t they have to pay a tax"

Not only that, but most trust fund babies I have known, and I've known a few in my time, skate through life receiving tax free "perks" from their parents well in to and through adulthood. They'll use mommy and daddy's houses, boats cars and airplanes tax-free for their entire life and then scream bloody murder when they have to pay taxes on the money that provided all those things.

[abelenkpe]

24. Absolutely not unfair

I sincerely doubt Vonnegut would find it unfair too.

[Donnachaidh]

25. republican labeling here?

Seriously -- it's an ESTATE tax. NOT a *death* tax. :eyes:

[Pryderi]

28. Aren't farms exempt from the federal aristocracy tax?

[lumberjack_jeff]

30. Q: how big does an estate have to be before taxes represent 50%?

A: Infinity. It never does.

No, you are the only one on DU who sees the social value of inherited wealth as greater than work. Sadly, everyone in Washington thinks aristocracy is just peachy.

No family farms have been lost to inheritance taxes in the last 20 years, and probably never.

The world sucks. I can't even get away from idiocy here.

[The Velveteen Ocelot]

31. If your heirs end up paying a lot of estate tax, it probably means

you had a lousy accountant. There are a whole lot of ways of setting up an estate, such as by the use of trusts, that result in the payment of little or no taxes.

[Yupster]

52. or you died an untimely death

That's the one I see the most at my job.

[Yupster]

53. or you died an untimely death

That's the one I see the most at my job.

[Laelth]

33. The death tax is very fair.

I think it should be higher.

-Laelth

[bemildred]

34. You need a fairly high exclusion, and then a really high confiscatory tax. nt

[Atticus]

35. HELLO??!! There is no such thing as a "Death Tax"! Never has been!

This term is the creation of Republican pollster Frank Luntz, who used "focus groups" to devise unpalatable phrases for programs favored by Democrats and warm and fuzzy terms for all things Republican.

It doesn't cost a damn thing to die. The tax in question is the "Estate" tax and it applies only to "estates" of what most would consider the very wealthy. The just-announced tax extension "compromise" will tax only estates over five million dollars in value.

No Democrat or liberal should ever use this term. Doing so only validates the GOP arguments, some of which are found in this thread, that "once you're dead, the government should not tax you" and "It's just WRONG to charge someone for dying!"

It's the "estate tax", OK?

[flvegan]

36. What's wrong with paying taxes twice on the same money?

Consider the inheritance. Likely every dollar coming from that was somehow earned by the deceased and taxed as income, capital gains, etc. Why not tax it a second time as an inheritance?

Sounds fair.

[nadinbrzezinski]

37. It is NOT a death tax for starters

that is a RW Meme.

It also affects very FEW people and founders got it... to avoid the formation of an aristocracy.

[Motown_Johnny]

38. No, it is not unfair

Anyone who can say a million dollars is not very much nowadays needs a tax hike

Many families live on 20 or 30 thousand a year.

[soryang]

39. The permanent alienation of wealth from commerce,..

is what the inheritance tax is meant to prevent. The permanent alienation of wealth from commerce is what characterized feudalism. Dumping that system is what the French and American revolutions were all about. An aristocratic title is not just a label, it is a propertied estate that supports a dynasty of heirs forever, with unearned income. Such was rejected by the founding fathers.

The desire of the current privileged class of wealth to have their heirs permanently avoid the inheritance tax is nothing less than the rejection of the concept of bourgeois democracy and the reinstatement of a fee or toll based society, where the wealthy live off unearned fees, or fiefdoms forever. It is particularly telling that they wish to do so without the obligation of a fair reciprocal obligation to pay taxes to the sovereign while they are alive. In other words, as in the ancien regime, they are completely corrupt.

The notion of dispensing with enterprise and living as feudal lords generation after generation,"and to their heirs forever," is antithetical to a free people. For serfs and slaves and their masters, a society based upon status of birth is okay.

Michael Hudson has a great essay on counterpunch discussing the true nature of Adam Smith's free economy and the pernicious nature of the "rentier" society of unearned inherited income now returning from the dark ages in the US to the detriment of a truly capitalist society. http://www.counterpunch.org/hudson12062010.html

[Greyhound]

55. Very well put. Cutting through the noise is essential to making good choices and

we've become inured to it from multi-generational exposure. Most people today have no clue where we came from, let alone why we made the trip.

Again, well done.:thumbsup:

[Odin2005]

40. THERE IS NO SUCH THING AS A DEATH TAX!!!

It's an ESTATE TAX, NEVER use that BS Right-Wing label around here

[dionysus]

42. i don't. pay your taxes suckah! if the estate is 5-10 mill no one will end up crying, even after tax

[Lord Magus]

44. Yes, it's unfair.

It's unfair that the first five million dollars of inheritance are untaxed.

[AlinPA]

45. "Death Tax" is Fox "news"speak. nt

[laughingliberal]

46. Quite unfair. Way too low.

Sorry. If people can't make it after deducting the first 5 million and pay 35% on the balance, something's wrong. Without an estate tax, all societies become plutocracies which we practically are now.

[NorthCarolina]

47. Death Tax?? Don't you mean the "Estate Tax"?

:shrug:

[sendero]

48. I prefer to live in a meritocracy..

... you know- the kind of society hypocrite Republicans are always claiming they want to live in.

Being born into a rich family is not a "merit". Inheritance taxes should be 100%. If you don't trust your kids enough to hand off your wealth before your die, they probably don't deserve a cent.

[Greyhound]

56. Absolutely!

It is far too low, and should begin at $1M, progressing to 99.9% by $5M.

Multi-generational wealth is a plague on our nation.