Inheritance tax: Make the case for and against

[Uncle Ted]

Yes. They have lobbied hard to keep it in place.

I have to wonder how much of Gates and Buffet's money is safely tucked away offshore. Ballmer, for example, keeps threating to move even more of Microsoft offshore and out of the reach of the long arm of the IRS. If Gates/Ballmer felt so obligated to pay more taxes then I have to wonder why they keep moving more of Microsoft out of the country.

[Sullyute]

Why should the government live off the hard work of the parents or grandparents? Especially when they have already gotten their share.

Someone had to keep all of our Senators (and their entourages) in the lap of luxury and we cannot expect the Lobbyist to do all of the work.

[Color Me Badd Fan]

I have to wonder how much of Gates and Buffet's money is safely tucked away offshore. Ballmer, for example, keeps threating to move even more of Microsoft offshore and out of the reach of the long arm of the IRS. If Gates/Ballmer felt so obligated to pay more taxes then I have to wonder why they keep moving more of Microsoft out of the country.

I don't recall Gates himself talking about this issue, it was actually Gates' dad that saddled up with Buffet on this.

[Sullyute]

Buffet supports it so he can buy family business that are crushed by the tax.

that is classic!

[Uncle Ted]

Buffet supports it so he can buy family business that are crushed by the tax.

LOL.

[Mormon Red Death]

that is classic!

Don't get me wrong... I like the Oracle. But to say he hasn't profited from the estate tax is wrong.

the “Oracle of Omaha’s” wealth has come from making wise investments in three different business activities. First, he’s made substantial investments in major corporations that he believes will appreciate; second, he operates a huge casualty and life insurance business which provides massive reserves of cheap capital to support his other two investing activities; and third, he purchases family owned businesses at fire sale prices. The last two practices are directly dependent on the death tax, and it’s unlikely that Mr. Buffett would be the world’s second richest man without it.

[Uncle Ted]

Don't get me wrong... I like the Oracle. But to say he hasn't profited from the estate tax is wrong.

This all make perfect sense now. Good find MRD.

[BlueHair]

I would like to see money taxed once. It doesn't really matter to me when or where. Charge me what you need to charge and do it once. Then at least I know exactly how hard I'm getting screwed. No deductions and no exemptions.

[Sullyute]

I'm sorry you haven't yet received any inheritance. That's no reason to despise those who do, or those those who have saved enough to be able to leave an inheritance.

I am sorry too!

I don't despise them as I wouldn't have a job if they didn't leave money for the next generation. I have seen people do some good things with the money they inherit, but I have seen plenty that it affects them negatively. Now, maybe they would have turned out the same way without money. Maybe this is just a reflection of our consumer driven and "ME" society. Obviously this is only my speculation based on what I have observed.

"I am opposed to millionaires, but it would be dangerous to offer me the position." Mark Twain

[Moliere]

I don't believe that. People don't give to Charity for the tax break. They give to Charity and Non-Profits for other reasons and the tax break is just a nice side benefit.

The loss of the tax break would be devastating to non-profits. People do give to charity for the tax break, although the type of charity obviously influences to which one they will give their money.

[Mormon Red Death]

The loss of the tax break would be devastating to non-profits. People do give to charity for the tax break, although the type of charity obviously influences to which one they will give their money.

Do you pay tithing for the tax benefit?
Does T Boone Pickens give to the Oklahoma St for the tax benefit?

Who gives a million dollars just so they don't have to pay the government $400,000?

[Jacob]

I would like to see money taxed once. It doesn't really matter to me when or where. Charge me what you need to charge and do it once. Then at least I know exactly how hard I'm getting screwed. No deductions and no exemptions.

This would probably lead to the result that gifts and inheritances are taxed as income to those receiving the gift or inheritance. In that sense, the current regime--even at the low exemption of $1m and the absurd rate of 55%--is a much better deal for almost all Americans. But that's really only because few Americans receive any inheritance of significant value.

That's why I think it makes sense to keep the current regime (without all the loopholes and incentives for insurance) but raise the exemption amount to $5m, or at least but it back at $3.5m and 45%. That's really the best deal for talmost everybody, and really not a bad deal for the heirs of the ultra rich, as they are still avoiding the 35% (probably higher if Obama and the dems get their way) tax on the inheritance as income to them at the top income rate.

[Moliere]

Do you pay tithing for the tax benefit?
Does T Boone Pickens give to the Oklahoma St for the tax benefit?

Who gives a million dollars just so they don't have to pay the government $400,000?

It won't stop the giving, but the amount given will decrease. I'll pay my tithing regardless, but if I want to donate money to BYU (they call twice a year btw) or to the local food bank I give them more than I would if the benefit was not in place.

For example, let's say in 2008 I give $1,000 to BYU and my ETR is 35% (both made up amounts especially given that my ETR was negative in 2009 ). I'm really only out $650. Then in 2009 the benefit goes away am I still going to give $1,000 or will I reduce it down to $650. I'd probably reduce it down to make sure I'm not out anything in addition to what I gave last year. In this example I'm making a decision similar to who corporations make decisions. Taxes are cash out flows and I'm sure many people, if not most, would think twice about giving at the same levels if it meant they were out 35% more cash.

[Joe Public]

The executors of the estates of those who died in 2010 have to elect to use the carryover basis option instead of paying an estate tax. To make the election, the executor must file the required form with the IRS by November 15 of this year. Executors generally cannot extend the deadline for filing the form.

Interestingly, the IRS has yet to release the form to the public. Even if the form were released today, executors would have fewer than 90 days to gather all required information. This may be a challenge for large estates (imagine George Steinbrenner's estate). Further, because the form and its instructions are not available, executors trying to gather information in advance of the form's release must guess at what information will be required.

I wonder whether some of the large estates are sweating it a little.

[Mormon Red Death]

I am not necessarily a big proponent of the estate tax, but it seems to me that the "double tax" argument is a red herring. All sorts of monies are taxed multiple times as they flow through the system. What makes this one more abhorrent than the rest?

Well.. I'm against all double taxing.