Mike 03
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Thu Dec-16-10 06:02 PM
Original message |
An Obvious Solution to the Estate Tax is a SLIDING SCALE |
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There is a huge gap between the farmer who over the course of decades has built up an estate worth three to five million and wishes to pass it on to his children, versus someone like Warren Buffet who makes billions a year and in his lifetime could not even hope to spend it all.
What is wrong with a modest tax for low estates and a high tax for high estates? It is not in our best interest to tax small family estates at fifty five percent. We should treat them differently than billionaire incomes.
Think of this: A family may have an estate of one million to three million dollars, but that doesn't mean they have an annual income that is stupendous; that estate could have been built over the course of decades.
I am not against the wealthy paying their fair share. I am in favor of the wealthy paying their fair share. But I believe we need to separate out the obscenely wealthy from the family estate that has been built up over years and years from hard work and is not even close to being in the same hemisphere as someone who makes hundreds of millions a year or billions.
There is a difference between the small family business that has amassed two million net worth and the Goldman Sachs exec who gets a hundred million as a yearly bonus.
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aquart
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Thu Dec-16-10 06:04 PM
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1. Whereas we could do nothing and let the Bush cuts sunset. |
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Instead of trying to force any rational financial planning on the right wing terrorist party.
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OHdem10
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Thu Dec-16-10 06:10 PM
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2. The first 5 to 7 million dollars are exempted from taxation. |
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5 million single 7 million married .
I would think this would cover those who have amassed over a long period of time????
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AlabamaLibrul
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Thu Dec-16-10 06:11 PM
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3. Five million dollars, in my opinion, is not a "small family estate". The kid can afford the taxes on |
MadHound
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Thu Dec-16-10 07:29 PM
Response to Reply #3 |
9. You're obviously not a farmer |
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Farmers' estates are generally tied up in the land, machines, and livestock. It isn't in cash money. I live in a farming state, and a thousand acre farm can easily reach the 5 million dollar mark, or more. Thus, to pay estate taxes, the kids have to sell off part of the land, reduce their herd or crop size, which leads to less income, and soon a vicious cycle starts in that will lead to the kids having nothing.
Many of these farms were bought when land was cheap. Over the past twenty years, especially the past ten, prices for land has shot up as those in the city kept moving out to the suburbs and exurbs, driving up the land prices to heights unseen before. So yes, while on paper, it looks like a nice plush estate, in reality it is simply a small farm struggling to get by.
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gmoney
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Thu Dec-16-10 07:54 PM
Response to Reply #9 |
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Edited on Thu Dec-16-10 07:56 PM by gmoney
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alc
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Thu Dec-16-10 06:49 PM
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4. I agree, but in the big picture any estate tax may result in reduced revenue |
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Every once in a while the IRS has an oversea tax amnesty. Since they do this I assume people are right who say there is A LOT of money hidden overseas (it's illegal, but that doesn't stop it). If that Goldman Sachs exec is old it give him more incentive to invest overseas (move money out of the US estate) and leave the money and profits there. I have NO IDEA who's right about the amount since the money is kept secret, but it may be that total tax revenue would go up if the estate tax is eliminated - more money is invested here which helps our economy and results in taxable profits on those investments.
It's certainly not fair for small family businesses to be torn apart (if that happens) but it's even more unfair if high-value estates get around the taxes.
These may just be right-wing talking points, but IRS amnesty programs make me believe there may be something to it. I do know the super-wealthy will do whatever they can to avoid taxes and this looks like a pretty simple way. And anything that causes lots of investment to move overseas needs to be considered pretty carefully.
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DURHAM D
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Thu Dec-16-10 06:50 PM
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5. blah, blah, blah farmers |
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Edited on Thu Dec-16-10 06:51 PM by DURHAM D
Why are they so sacred? Very few "family farms" hit the several millions of dollars mark and I just can't worry about the ones that do. Everyone else pays taxes why shouldn't farmers. gheez
Two million has been under the exemption for years. Remember to always double the exemption because usually it is a couple leaving an interest to heirs. So in the new "deal" the actual exemption will be $12 million for estates. If its bigger just stick it in a trust.
Just so you know, last year I inherited interest in a family farm. As a business owner I just could not get all worked up over the "paying taxes" anxiety. I finally told one of my siblings to just grow up.
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WCGreen
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Thu Dec-16-10 06:52 PM
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6. It should be abolished and replaced with a capital gains transfer tax.... |
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Once the property is transfered it is an economic transaction and thus triggers a taxable event...
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MindandSoul
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Thu Dec-16-10 07:15 PM
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7. Now, correct me if I'm wrong. . .but where the Estate Tax is concerned |
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Isn't it the HEIRS that are taxed? In that case, what's wrong with a $1 or $2 millions treshhold without tax, and taxed on a sliding scale (let's say, 20% up to $5 millions, then 35% up to $15 millions, and 60% for everything above that). Because. . .my understanding is that it is not the full estate that is taxed. . but EACH heir. . .which means that if one person leaves an inheritance of $12 millions to be shared between his 4 kids. . .each kid would only get $3 millions each (probably less after probate costs!!!) and would probably pay only 25% each!!!!
Now, why is it better to fight taxes than it is to fight the huge probate costs imposed on inheritances???
And why should "inherited" tax be lower than a "tax on salaries?". . .I thought the big argument against giving tax break to the middle class rather than to the very wealthy was that "the very wealthy work sooooo hard!" So, if "hard work" is part of the equation. . .why tax hard work more than "being born into it?"
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DURHAM D
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Thu Dec-16-10 07:46 PM
Response to Reply #7 |
10. Estate taxes are paid by the estate. |
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Inheritance taxes (if any) are paid by the heirs.
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stray cat
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Thu Dec-16-10 07:20 PM
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8. They tried it and it was voted down |
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