taxing the rich...estate tax - Page 2 - TigerDroppings.com

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Newbomb Turk
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts

re: taxing the rich...estate tax


quote:

About 600-650 acres of Iowa farm land gets you to 5 million in ground alone. I know I will never be worth 5 mil, but I know people with 700-1,000 acres.


Another myth ... there are more ways to pay estate taxes over time (as much as 10 years as I recall) or delay entirely, than anyone could possibly complain about.






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Oyster
LSU Fan
North Shore
Member since Feb 2009
7025 posts

re: taxing the rich...estate tax


quote:

They extended the 5MM estate tax exemption, and extended portablilty...making the exemption 10MM. But I thought the left was all about sticking it to the man. Could it be that they care more about rhetoric than actual substance?


Exactly. They know what they are saying is total bull shite.






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dunkelman
LSU Fan
shreveport
Member since Oct 2005
862 posts

re: taxing the rich...estate tax


Scoop,

Please run for office You have my vote.






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texashorn
Member since May 2008
1502 posts

re: taxing the rich...estate tax


Let's say you have a farm or business that is valued at $3 million, and the estate tax rate is 35 percent, which I believe it is currently.

For simplicity's sake, let's assume that it's straight-up 35 percent of $3 million, which is about $1 million, and you owe ten equal installments of $100,000 to the federal government.

I'm not sure having to cough up $100,000 a year to the federal government in estate taxes alone (not including business or personal income taxes) is so easily manageable for small farms and small businesses (small in terms of profit).






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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
29693 posts

re: taxing the rich...estate tax


quote:

The VAST majority of people who have an opinion about any policy have no f*cking clue how it works.








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Newbomb Turk
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts

re: taxing the rich...estate tax


quote:

Let's say you have a farm or business that is valued at $3 million, and the estate tax rate is 35 percent, which I believe it is currently.



quote:

quote:

The VAST majority of people who have an opinion about any policy have no f*cking clue how it works.





Ya see!!!






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texashorn
Member since May 2008
1502 posts

re: taxing the rich...estate tax


You are welcome to explain, oh wise one.





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texashorn
Member since May 2008
1502 posts

re: taxing the rich...estate tax


The current $5 million limit? Which would make the ten-year installments even higher?

ETA:

quote:

In 2002, Duffy said, the average value of Iowa farmland was $2,083 per acre. In 2011 the average value stood at $6,708 an acre, and the forthcoming 2012 survey is likely to show at least a 15 percent increase during the past year, which would put the average around $7,700 per acre.

LINK

500 acres x $6700/acre = $3,350,000.

Is the estate acreage not valuated at 100 percent?



This post was edited on 1/19 at 11:51 pm


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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14998 posts
 Online 

re: taxing the rich...estate tax


Technically the government is not taxing your property because it is forbidden by the 5th Amendment. The government is taxing the transfer of your property to another citizen. The dirty little secret is that the government does not like citizens owning property, but it can't prevent it. So what it does is claim ownership of a portion of the property when ownership is transferring from one citizen to another. When the citizen is alive the government collects capital gains or gift tax. When the citizen is dead the government collects an estate tax, from qualifying citizens.







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germandawg
Member since Sep 2012
2718 posts

re: taxing the rich...estate tax


quote:

taxing the rich...estate tax
It would be awesome if someone could explain why stopping breathing means the government can take a shite ton of the money you left behind that has already been taxed extensively while you were breathing.


It is really pretty simple. All income is taxed. The money your employer uses to pay your salary comes from people who earned it and paid taxes on it...they are called customers. So, by the reckoning of people who are opposed to estate taxes, that money should not be taxed again....but of course if this were the case it would never be taxed in the first place. Estate taxes suck as bad as all taxes but the money is simply income. The source is a dead person and that is lamentable but it is income none the less. It should be taxes just like regular income, but instead it is taxed in a special category of income much the same as capital gains. No matter what you call it it is all income, or money INCOMING from an outside source......






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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
6564 posts

re: taxing the rich...estate tax


quote:

When the citizen is alive the government collects capital gains or gift tax. When the citizen is dead the government collects an estate tax, from qualifying citizens.


What ever happened to the roll forward on the capital basis when a person dies? It used to be that the capital gains were wiped out and the new basis for the heirs was the value at the time of death. In a way, the estate tax was an offset to the loss of the capital gains tax. I believe there was some debate about eliminating the roll forward and making the original purchase price the basis for the heirs. The two really need to be considered together.



This post was edited on 1/20 at 6:17 am


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BBONDS25
LSU Fan
Member since Mar 2008
15907 posts

re: taxing the rich...estate tax


What ways to pay over time are you talking about? I am not familiar with that at all.





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Zach
LSU Fan
Member since May 2005
62941 posts

re: taxing the rich...estate tax


quote:

No tax makes less sense than the estate tax. What is the justification?

Of all the kinds of taxes that exist the estate tax is the one which is most driven by ideology as opposed to being driven by revenue generation.

The core value system of liberals is egalitarianism (also called 'fairness' or 'social justice'). A child having $10M dumped in their lap by the death of parents chafes liberals raw.

You know the cliches: "He thinks he hit a home run when he actually started at 3rd base."

This also dovetails in with the liberal view that most rich people inherited their wealth when, in fact, a very small percentage of millionaires were born to parents who were millionaires.

I am not rich. The estate tax will not hit my kids when I pass on to that great golf course in the sky. But I oppose it for two simple reasons:
a. It is philosophically repugnant.
b. It raises very little revenue.






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Dreamweaver
Member since Aug 2011
49 posts

re: taxing the rich...estate tax


quote:

What ever happened to the roll forward on the capital basis when a person dies? It used to be that the capital gains were wiped out and the new basis for the heirs was the value at the time of death. In a way, the estate tax was an offset to the loss of the capital gains tax. I believe there was some debate about eliminating the roll forward and making the original purchase price the basis for the heirs. The two really need to be considered together


This is why the poster who said people don't really understand how the estate tax works was so right. As long as we have a capital gains tax (which is a completely different debate), the estate tax is not complete double taxation. In many cases a large amount of the assets that are taxed are unrealized capital gains. So, the tradeoff for paying the estate tax is that the heirs get the assets at the date of death basis. For the one year (2010) that the estate tax was officially repealed, rolling forward the basis was repealed. To me that would be the ideal system, but it is very cumbersome keeping track of basis of assets that haven't changed hands in sometimes generations.






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
14998 posts
 Online 

re: taxing the rich...estate tax


quote:

What ever happened to the roll forward on the capital basis when a person dies?
There is still the step up in basis to fair market value at the date of death, and that will eliminate and unrecognized capital gains. Any post-death appreciation in value would be subect to capital gian however.

For someone who died during 2012 the maximum estate tax would have been 45% of an assets value while the maximum long-term capital gain tax would have been 15% of the sales price less the adjusted basis in the asset. The latter is at most 1/3 of the former. If I could inherit property without any estate tax I would gladly pay the long-term capital gains tax on any inherited property.






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Ace Midnight
LSU Fan
Ball, LA - Home, Sweet Home
Member since Dec 2006
29107 posts

re: taxing the rich...estate tax


quote:

It would be awesome if someone could explain why stopping breathing means the government can take a shite ton of the money you left behind that has already been taxed extensively while you were breathing.


Because dead people never vote against Democrats.






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WildTchoupitoulas
LSU Fan
Member since Jan 2010
14584 posts

re: taxing the rich...estate tax


quote:

The rhetoric from the left is that the rich need to pay their "fair share". If that is the case why did they make permanent the 5MM dollar portable estate tax exemption?

No kidding, Rugged Individuals don't need no 'inheritance'. 100% estate tax now!






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Ace Midnight
LSU Fan
Ball, LA - Home, Sweet Home
Member since Dec 2006
29107 posts

re: taxing the rich...estate tax


quote:

No kidding, Rugged Individuals don't need no 'inheritance'. 100% estate tax now!


Once again, the left's voracious appetite for "revenue" completely ignores that, for wealthy people, taxation is largely voluntary. They can afford various legal tax avoidance structures, such as trusts, family corporations, just a whole host of things.

What happened was that the federal estate tax struck family operated farms, ranches and other businesses particularly severely, whose value had creeped up over the years, but not easily monetized upon the death of the patriarch/matriarch, and those assets had to be liquidated. This allowed, particularly, for massive consolidation of these types of businesses by larger holding companies and mega-corporations.

True millionaires and billionaires have many tools, and excellent legal and tax advice, which virtually eliminates, at least from a relative percentage standpoint, their estate tax burden.



This post was edited on 1/20 at 10:09 am


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WildTchoupitoulas
LSU Fan
Member since Jan 2010
14584 posts

re: taxing the rich...estate tax


quote:

This allowed, particularly, for massive consolidation of these types of businesses by larger holding companies and mega-corporations.

Kinda shows you who's really in charge of designing the tax structure...


...and pretty much everything else.






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BBONDS25
LSU Fan
Member since Mar 2008
15907 posts

re: taxing the rich...estate tax








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