Death tax. Democrats are grave robbers. Remember when grave robbing was a crime?

I think the democratic party could increase their credibility to the level of convicted murderers if they reached into their multi-billion dollar wallets and contributed to the national debt. They're rich as hell, want to lower the national debt, want higher taxes "for rich people like them"... why dont they just bypass the beuracrats and donate it straight to the national debt? Anyone can do it.. but no one does... makes you wonder...

Thank you so much for this post. This is an issue which affects all Americans, young and old, because at bottom, it's about the freedom to give.

When you can't even give to your own kids without meddling, something is seriously f**ked up.

Umm, Mark, when you donate $30 billion to charity, you are not passing on that wealth to your children. Very simple difference. The estate tax is essentially a tax on the BENEFICIARIES of a massive inheritance, not the deceased.

In fact, if you make those donations while you are still living (as Buffett has committed to doing), they are actually tax write offs. I don't know anyone who is against tax deductions for charitable giving (to legitimate charities, that is.)

And the quote of $40,000/year to Peter Buffett? That is a modest income, and he pays income taxes on it. (As an unusual aside, he's also a good composer who I had to pleasure of recording with as a child.)

If only every self-made man had the will to give their wealth to charity...

You might want to take note that not all his money is going to charity. His children certainly aren't jeolous of the distribution and organizations such as Planned Parenthood are recieving money.

And since when are liberals all high on rich people? I thought rich people created all the problems in the world? It seems like only a few days ago, the fanatical left-wingers would declare this man was the cause of some the housing and income disparity in this country. How about Gates? He profits billions while struggling americans pay through the nose to be able to use their computers? Aren't those the lines liberals have written down in their manifesto?

ben stein gave me pause 4 thought on "the rich" (whatever that means) paying more taxes.

the exchange went something like this:

oreilly: why should I pay more taxes?

stein: because u enjoy strong law enforcement which allows u to make your money. otherwise the poor would kill u & take what u own.

oreilly:...(speechless)...(mouth agape)...

In Buffett gift, challenge for Gates

He was both hilarious and scathing on Sunday in describing how much he favored estate taxes something - the Bush administration is working hard to overturn.

Nothing is more offensive to the American tradition of meritocracy, he said, than rich men being able to pass on "dynastic wealth" and let their grandchildren determine the fates of hundreds of fellow Americans.

Jokingly asking if he had left anyone insulted, he described how offended he was when he heard rich Americans at country clubs describe their feeling that giving welfare to poor people keeps them in poverty "while they are trying to leave their children a more-than-lifetime-supply of food stamps and are substituting a trust officer for a welfare officer."

The first $1 million of an estate should be tax free, everything over that should be taxed at 100%. Wealth should be obtained the old fashioned way, it should be earned and not inherited. Peace

There is no hypocrisy here. One of the main arguments in favor of keeping the estate tax is that it encourages large charitable contributions from the super wealthy. That is why large charities are against the repeal.

The other main argument in favor of the estate tax is that it throws an obstacle in the way of a small number of people accumulating incredible amounts of wealth through no merit or work of their own (unless winning the sperm lottery counts as merit).

Buffett has maintained for years that he would not pass on more than a few million to his children. He is now carrying out that promise. He exemplifies the ideal of not perpetuating vast wealth through inheretence.

winnowhead - correct. 30 Billion of 37 billion is not going to organizations controlled by his children. I've got to agree with you, 7 billion dollars is chump change.

And really - this is a valid point isn't it? An advocate of retaining the estate tax avoids it? Just like the kennedy's and the Kerry's and well, all the VERY rich Democrats. Come on - admit it. This is hypcracy.

weeniehead, the death tax does NOT just affect beneficiaries of "massive" inheritances. This is a beloved Lefty canard, but so untrue.

The truly rich spend millions on estate planning, setting up trusts and other mechanisms to keep their "massive" assets untaxable. It's the guy in the middle, and his families, who suffer.

Farmers are a great example. There's not a lot of money to made on a family farm, but farming is an inheritance, a passion. It's in the blood of those who love it. And the small farmily farm is becoming a thing of the past. Why? The biggest reason is the death tax.

A farm big enough to provide a modest living for an extremely hard-working family, a precarious living due to the many difficulties in actually harvesting a good crop every year, can be valued at millions of dollars if valued at prime residential or commercial real estate values. As farmland, it might net forty thousand a year. That is not enough to pay debt service on a half million dollar tax bill.

Selling the land is a problem, too. Great-grandpa might have paid a thousand dollars for those acres. Factor in capital gains tax on the appreciated value, on top of the death tax. So an entire family is relocated, stripped of its heritage and its dreams and the ability to continue doing the only thing it wants to do---while feeding America.

But these people are RICH, you say. That land is worth MILLIONS! TAX those indolent wealthy SOBs and make sure they don't get to lounge around on Daddy's dollars!

Millions of acres of farmland are removed from agricultural use every DAY---thank the death tax for much of this.

Ask Ash to get off his ash and run down to the San Luis Valley and report on how dead and brown it is. Once the area became popular with people moving to Colorado, the land became valued at its highest possible value, that of subdivisions, and inheritors had to make a choice---sell the land or sell the water. Too many sold their water rights to big cities, just to able to hang onto land that had been in their families for many generations, and now a once-vibrant farming valley famous for its produce is dry and brown and nearly infertile.

(Water rights in the West---another issue you probably have never heard of.)

I once heard an interview with a woman who had worked her whole life side by side with her dad in the family dry cleaing business. He was a simple man, making a decent living but not sophisticated in financial matters. When he died, the family learned that the location of the dry cleaning shop was valued highly as commercial real estate, and they had to sell to pay the estate taxes. A family business was gone, along with the tradition that had been valuable to them.

No, this "massive wealth" claim is just another of the Left's class warfare antics. I can guarantee that even if Buffett scorns trusts for his family, others with "massive" wealth have elaborate trusts set up for their families, where they receive the income from the investments but not the capital, thereby never actually RECEIVING the capital, thereby never paying tax on it. So what's the difference to them? They get a few million bucks outright and invest it and live off the income, or they just live off the income. The rich can do this because it is MONEY they will be leaving. The middle class can't, because they are leaving land or businesses.

Even Buffett acknowledges the trust officer's role in the lives of the truly wealthy.

Almiranta,

You are arguing a point that the Democrats are willing to correct, they already stated they are willing to make exceptions for family farms; but i suppose it isn't convenient to talk about that part. Instead you want to trash a tax that provides about a trillion dollars in revenues, over a 10 year period.

The right only likes to complain about self-reliance, when it doesn't involve them having to hold any of that responsibility.

The plain and simple fact, that even Carnegie understood, was that the wealth accumulation wouldn't be possible without the blood, sweat, and tears of those on the lower rungs of the social ladder. To allow the benefactors of the rich to be free from paying back the people who helped give them this gift, is not only immoral, but an anathema to the ideal of meritocracy that the US was built on.

$4 million dollars, even in today's economy, is a large amount of wealth for a couple to hold, and if they aren't bright enough to properly plan for their estates, then tough cookies, there are plenty of chances to get their affairs in order, without punishing the rest of the nation by repealing a very progressive tax.

TEO - But where I live in Northern Virginia a nice house close to the beltway can be 1 to 2 million. So, say you a house in Great Falls ($2 million) and some horses and all the stuff that goes with that, some cars, a boat. Maybe Three million in total assets. You die. Rather than you daughter being able to move into the house where she grew up, the government takes half. So, she has to sell the house to pay the taxes. Meanwhile, the rich proponents of this tax exclude themselves.

Why can't you admit that this is hypocracy? Come on, if we're going after the VERY rich - then you have to be willing to critisize this deal, plus the Kennedy's, and the Kerry's, and George Soros. Your failure to do so really undermines your credibility. These people have all put mechanisms in place to exclude their wealth from the taxes they advocate for others.

Or, do you just prefer blind hatred to reasoned thought?

"I would as soon leave my son a curse as the almighty dollar." Carnegie.

The "plain and simple fact" is that the bill argued by the proponents of this confiscatory tax contains no exceptions for “family farms” or any other family business; it sets a dollar amount on the assets which may be trusted regardless of the nature of the assets.

The amusing part is that the government feels it’s entitled to your assets upon your death but your family isn’t.

Millions of acres of farmland are removed from agricultural use every DAY---thank the death tax for much of this.

I suppose, then, that you can show us the millions of acres of farmland that are removed from agricultural use due to the estate tax? Actually, I suppose you can't--that way I'm playing the odds.

As factcheck.org points out (I know nonpartisan fact checking scares the crap out of you, but try to confront your fears on this one):

So – just to be clear – that means that for the vast majority of Americans the estate tax will take zero per cent. Just over one per cent of Americans who died in 2002 owed any estate tax at all, according to the most recent figures from the Internal Revenue Service. That was when only the first $1 million was exempt. Now that the exemption has doubled, experts at the nonpartisan Tax Policy Center calculate that only 12,600 Americans who die in 2006 will owe any estate tax at all. That's roughly one in every 200. Furthermore, even for those affluent few, the Tax Policy Center estimates that the estate tax will take an average of 18.7 per cent. Even for estates valued at over $20 million, the average tax will be 21.7 per cent.
(emphases mine)

Also note that the article cited was written in order to dispel ads full of right-wing lies about the estate tax. I'm sure, being the brave warrior for truth you like to pretend that you are, you're outraged that right-wingers could lie so brazenly.

Bane and Kahn,

First off, read the Democratic bill, they would restructure the tax so that family farms would be excepted, but you have to prove that the farm has been in the family hands for something like 2 generations, so it doesn't create a tax shelter for city-slcikers.

Kahn, If you're married, then the limit is $4 million, but either way, if you can afford a 3 million dollar home, and then another million in assets, im sure you can afford a lawyer and tax expert to find you "creative" ways to hide your money, don't be so stupid to think that we believe a person with 2 or 4 million in wealth cant figure out how to secure it for their kids, the super rich are the targets of this tax, and to take away a trillion dollars in a decade so a Soros or a Murdoch can buy an extra media outlet or two, is pure and simple BS.

Who cares about taxes, the ecomony's doin' great. DJIA down 7% in a month. Hell, we're almost back to 1999 numbers. What's in your wallet?

TEO,
I find three republican proposals and one democrat proposal, "Sen. Max Baucus (Democrat from Montana) is circulating a proposal, which could further complicate estate tax repeal votes expected to take place in the Senate next week.

According to BNA, the Baucus proposal would “include a progressive tiered approach that would impose a higher estate tax rate on larger estates, with the top rate at 35 percent. The plan could exempt estates below $3.5 million – the same exemption that will take effect in 2009 -– while taxing estates just above that amount at 15 percent, a middle range of estates at 25 percent, and those above a certain threshold at the top rate.”

Please direct me to a democrat plan that exempts "family farms" or "family businesses".

3years,
Do you know anyone that invested in the DJIA? I mean, I invest in mutual’s and bonds and most people have retirement funds that invest in a host of different items, but I don't know a single person that bought stocks in all of the Dow's industrials, that would be foolish, don't you agree?

Bane,

I hate to sound like most of you here but, what an idiot!

Okay,
Enlighten me, you can't seem to stay away, so feed the addiction. Tell me how the DJIA affects the average American's investment portfolio including retirement funds.

Oh come on. Most 401k's, mutual funds and even reasonably diversified portfolios somewhat track the major equity markets. Otherwise, why would anyone care that the markets fall by even 50%. It is certainly possible to actively trade and even make money in a down market but in general, when the dow and nasdaq drop by 10%, very, very many Americans are effected. Call me silly, but I personally put everything into cash and equivalents back in May. This is just the start IMHO. We'll talk again in Oct/Nov and see what you think.

Are you talking about the economy or investments? What are the "major equity markets"? What do you mean by equity?

Investments like 401(k) and 403(b), and other indexed retirement funds have grown over the years, they do not remain stagnent because the DJIA doesn't pass 11,000. Remind me to not have you do my investing.

I’ll give you a hint, the Dow is not a reliable indicator of the economy when something as narrow as the Industrials are viewed.

From its inception the Dow stayed below 1,000 until 1982, to your small understanding that means the economy was the same in 1936 as it was in 1920 and was much better in 1934 than 1950.

But, if you're talking about the economy which was the subject of your sophomoric post, better indicators of the economy are GDP, Job Growth, Consumer confidence, Retail Sales, & Earnings growth.

Bane,

I can't find the snippet I heard of last week, it was probably just a democrat blustering about what they wanted to do, no surprise there.

I still don't see the use is repealing the tax, i can't find information about a single privately owned farm being seized, and anyone who leaves their estate to their spouse, isn't affected by this tax anyways, I don't understand how taking a trillion dollars out of federal coffers over the course of 10 years, especially when we are going to be feeling a pinch with retirements, is fiscally responsible.

Yes, all very good indicators and, wait for it, they're getting ready to tank. I'm not talking about the level of the dow, I'm talking about major changes. There is a difference dude and you know it. Like I said, come the end of the year, if I'm wrong, I'll personally come back and say so, how bout you?

BTW, the era you mention was when stock generally paid dividends, remember those? Different game today.

TEO,
You don't understand it because, like every other liberal, it's not your money.
and here's the rub; it's not the governments money either.

3year,
My investments still pay dividends, don’t yours? Oh, that’s right, you have your money in fungible assets, okay, here’s what you do:

1) Buy silver, it holds its value and when the economy collapses you can still barter with it.
2) You’ll need a way to protect your assets, so buy a gun; this had the added advantage of giving you piece of mind with all of your other assets.
3) For maximum protection, convert the bullets to silver, this way they’re easy to store, have the original value, if someone wants to take them you can give them the silver at about 2,300 feet/second, and werewolves won’t try to take your investment.

For me, I’ll continue to move my investments around based on the markets and if things start to look precarious, I’ll buy Government Bonds and become one of the debt holders the liberals are always in terror of.

Maybe I should convert my estate into silver bullets so my family can pay off the revenuers at 2,300 ft/sec when they come to collect my death tax.

Buffet was, of course, the second most prominent member of Billionaires for Kerry. We add Trump, Lewis, Saban, Winfrey, Jobs, Turner and the Numero Uno; Richest Man in the World (by a good country mile) George Soros. Gee, if money is evil...

I agree completely. Letting people dontate to charity is a real scam. Much better to simply put the charities out of business, raise taxes, and then have the government pay for services formerly provided by charities (food, clothing, medicine).

"Gee, if money is evil..."

Posted by: megapotamus

lol!

I dunno bout you guys but I'm all for naming the repeal of the Estate Tax "The Paris Hilton Tax Relief act"

That poor girl be in such dire straits for money she gets herslef in the most embarrasing situations and puts it on TeeVee. Hell one time I even watched the poor thing eat a burger while washing a car. Though as skinny as she is I can't imagine she gets more then one of those sandwiches a week.

I was just awash in pity for the desperate girl.
If I had a check book I would nmail her a donation, just to keep her off the streets. As it is right now she is most certainly in our prayers most every night.

Please write your Congressman to Repeal the Estate Tax so that Paris Hilton may be well taken care of.

Bless you all!

I dunno bout you guys but I'm all for naming the repeal of the Estate Tax "The Paris Hilton Tax Relief act"

That poor girl be in such dire straits for money she gets herslef in the most embarrasing situations and puts it on TeeVee. Hell one time I even watched the poor thing eat a burger while washing a car. Though as skinny as she is I can't imagine she gets more then one of those sandwiches a week.

I was just awash in pity for the desperate girl.
If I had a check book I would nmail her a donation, just to keep her off the streets. As it is right now she is most certainly in our prayers most every night.

Please write your Congressman to Repeal the Estate Tax so that Paris Hilton may be well taken care of.

Bless you all!

DinkyDick,
Are you typing with your nose? I've never seen worse writing skills.

Kahn and Almiranta,

winnowhead - correct. 30 Billion of 37 billion is not going to organizations controlled by his children. I've got to agree with you, 7 billion dollars is chump change.

And really - this is a valid point isn't it? An advocate of retaining the estate tax avoids it? Just like the kennedy's and the Kerry's and well, all the VERY rich Democrats. Come on - admit it. This is hypcracy.

No, it's not valid. The wealth passed onto his children will be covered by the appllicable taxes. The purpose of the estate tax is to cover an inheritance. A charitable gift is not an inheritance.

From Almiranta:

Farmers are a great example. There's not a lot of money to made on a family farm, but farming is an inheritance, a passion. It's in the blood of those who love it. And the small farmily farm is becoming a thing of the past. Why? The biggest reason is the death tax.

I don't know how many farmers you actually know, but the estate tax is not the reason for the loss of family farms. Government subsidies that disproportionately benefit large corporate farms, driving down prices, would be a good place to start. But that's another topic.

Irregardless, falling back on the family farm as a justification for doing away with the estate tax is a canard. The typical family farm does not pay any estate tax, and those that do pay very little. The average in 2004 was $2,248 (see the numbers from the Tax Policy Center here). The average itself is inflated because it includes "family" farms with values over $20 million.

The truth is simple: less that 0.5% of all estates are covered by the current tax. And, actually, I would support raising the exceptions on it slightly, further lowering the number. But it is YOU, not me, who is being deceived if you think average people or family farms are hurt by this tax.

Which gets to the crux of the issue: would any of you who are against the estate tax prefer to argue on the principle of a tax that prevents the creation of a permanent landed genrty in this country, instead of falling back on the false idea that the middle class is hit? (Even if it were true, it is not an argument against the PRINCIPLE of an estate tax)

Investments like 401(k) and 403(b), and other indexed retirement funds have grown over the years, they do not remain stagnent because the DJIA doesn't pass 11,000.

Bane, I'm sure there are Liberals somewhere who understand this, but probably not most of the ones who post here who are 15-25 years old and don't know jack about investing. I heard on the news within the last couple days that since the DOW first passed 11,000 in, what, 1999 or 2000, corporate profits have doubled. Shows how much the DOW reflects economic growth. Same with the S & P 500 -- it's not even close to being back to where it was in 2000. I haven't owned a large cap fund in 6 or 7 years.

Call me silly, but I personally put everything into cash and equivalents back in May.

Not silly at all, TMY -- one of the smarter things I've seen you say. I sat at the computer with my finger on the mouse for most of a day the first week of May, trying top decide whether or not I wanted to bail. I read a lot of financial news, and virtually no one in the financial community was predicting a correction of the magnitude we've seen. Ultimately I decided to ride it out because market timeing is something I've never been good at. For every time I've been successful, I've been burned twice. I'm still up for the year, but not nearly as much as I was on May 9th. Oh well, it's only money.

Winnow,
What do you mean by, "The wealth passed onto his children will be covered by the appllicable taxes"? The "wealth" has already been taxed as income, and capital gains. How else does wealth passed to children get taxed?

Bane, very funny but not really. Weren't you among the chorus on this blog trumpeting the dow hitting 11,700 but now when it's tanking, it really isn't useful as an economic indicator? Interesting.

Second, yes, I've been burned by the market, specifically in 2000/2001 and refuse to be again. I'm 48 and can't affond to take that kind of loss. I've got ~700k sittin in cd's, MM, bonds etc and quite happy to be making a guaranteed 5.5+% return in this time of uncertainty. I have the feeling many others are doing so also. By the way, having liquid assets lets me take advantage when everything goes to S#!t.

Third, silver and gold, while attractive, are a little to volatile for me - at least right now.

Fourth, yes, I've bought some new guns and stocked up on ammo, come on by and I'll show you. No silver but hollow point, buckshot, 223 etc. Ought to do in a pinch.

Spook, I've been watching the same and the correction was predicted by some and even worse, it has yet to be fully realized. I missed the real pullout by 1 week but am still happy I did. Like I said, I don't expect the market to do anything but get worse this year and am quite happy just earning interest.

Once again, let's revisit this at the end of the year.

Bane, very funny but not really. Weren't you among the chorus on this blog trumpeting the dow hitting 11,700 but now when it's tanking, it really isn't useful as an economic indicator? Interesting.

Second, yes, I've been burned by the market, specifically in 2000/2001 and refuse to be again. I'm 48 and can't affond to take that kind of loss. I've got ~700k sittin in cd's, MM, bonds etc and quite happy to be making a guaranteed 5.5+% return in this time of uncertainty. I have the feeling many others are doing so also. By the way, having liquid assets lets me take advantage when everything goes to S#!t.

Third, silver and gold, while attractive, are a little to volatile for me - at least right now.

Fourth, yes, I've bought some new guns and stocked up on ammo, come on by and I'll show you. No silver but hollow point, buckshot, 223 etc. Ought to do in a pinch.

Spook, I've been watching the same and the correction was predicted by some and even worse, it has yet to be fully realized. I missed the real pullout by 1 week but am still happy I did. Like I said, I don't expect the market to do anything but get worse this year and am quite happy just earning interest.

Once again, let's revisit this at the end of the year.

3,
Nope, you and I discussed inflation (hedonics; why we don’t include 8-track tapes anymore) and unemployment (you believed that when a person runs out of Unemployment compensation they aren’t counted anymore). In fact, I believe I quoted other economic indicators other than the Dow because I use those other indicators in my work. Consistency is the key.

What do you mean by, "The wealth passed onto his children will be covered by the appllicable taxes"? The "wealth" has already been taxed as income, and capital gains. How else does wealth passed to children get taxed?

Ho hum. Changing the topic.

The claim I'm refuting is that Buffett is "avoiding" paying taxes. I say charitable giving is different from an inheritance.

A dollar is taxed over, over, and over again as it changes hands from one person to another. Estates passed to a children are no different.

And I might add, when assets from an estate are passed on in the form of stocks, as all of Buffett's wealth exists (in Berkshire Hathoway shares), the realized capital gains are NOT taxed. Now, if he sold the shares, and passed CASH to his children, it would be taxed twice. But the estate tax is the only way those assets are taxed when securities are the inheritance.

What do you mean by, "The wealth passed onto his children will be covered by the appllicable taxes"? The "wealth" has already been taxed as income, and capital gains. How else does wealth passed to children get taxed?

Ho hum. Changing the topic.

The claim I'm refuting is that Buffett is "avoiding" paying taxes. I say charitable giving is different from an inheritance.

A dollar is taxed over, over, and over again as it changes hands from one person to another. Estates passed to a children are no different.

And I might add, when assets from an estate are passed on in the form of stocks, as all of Buffett's wealth exists (in Berkshire Hathoway shares), the realized capital gains are NOT taxed. Now, if he sold the shares, and passed CASH to his children, it would be taxed twice. But the estate tax is the only way those assets are taxed when securities are the inheritance.

Bane,

I agree with you about the indicators. I'm no economist however, you can't discount the dow and nasdaq as having no meaning. I never meant to imply that this is/was the only measure of the economy, just one and one that seems coupled well to mutual fund and other performance.

All money choices are a gamble. I've chosen and so have you so let's just agree to have this conversation at the end of the year. ok?

sorry if this posts twice, the site is really having poblems eh.

Window,
Okay, so there are no other ways to tax money passed from parent to children. I didn’t think so.

Next, money is taxed as income, or as capital gains when the instrument is cashed or the annuity is paid out, correct? Therefore on the income side the estate has already been taxed when it was earned, and if the instrument is given in the form of inheritance it’s taxed as income first, taxed as inheritance when it passes ownership and taxed a third time when the instrument is redeemed, correct?

Finally, purchases are taxed a number of ways but income is only taxed as income or capital gains, so I don’t see how “A dollar is taxed over, over, and over again as it changes hands from one person to another” Unless you have a citation for this I'll assume you are being theatrical again.

The fact is that the government has no legitimate right to tax you upon your death for any reason other than you died; there was no creation of income, no capital gain, no investment pay-off and no new wealth as a result of dying.
You are now free to change the subject.

3,
Perhaps we can both think a bit more before making one-liners to establish a point. Most of the time we’re not a clever as we think we are when we type them anyway.

You have some very valid points vis-à-vis inflation; but I think you may be on the right track for the wrong reasons. I don’t see the economy “goin’ south” this year, but I will be very careful with my investments until the energy price bubble passes completely, maybe by Spring 2007?

I don't think you know what you're talking about...

Okay, so there are no other ways to tax money passed from parent to children. I didn’t think so.

Huh?

Next, money is taxed as income, or as capital gains when the instrument is cashed or the annuity is paid out, correct? Therefore on the income side the estate has already been taxed when it was earned, and if the instrument is given in the form of inheritance it’s taxed as income first, taxed as inheritance when it passes ownership and taxed a third time when the instrument is redeemed, correct?

Wrong. The person who cashes out those shares only pays capital gains on the appreciation from the date of the death of the benefactor. If you inherit $10 million in stock and sell it immediately, you owe no capital gains taxes. Hence, all the appreciation that otherwise would have been taxed during the lifetime of the benefactor is tax-free. The estate tax is the only way that money would be taxed.

Finally, purchases are taxed a number of ways but income is only taxed as income or capital gains, so I don’t see how “A dollar is taxed over, over, and over again as it changes hands from one person to another” Unless you have a citation for this I'll assume you are being theatrical again.

Let say I earn $20. After tax I have $15. I spend that $15. The guy I buy my groceries from makes 20% profit on that. He pays income taxes on that profit, as do all of his suppliers. In other words, everytime a gain is realized from an exchange of money, tax is paid. The money circulates again, and any growth as a result of that circulation is again taxed. Not too complicated... an inheritance is really the purest form of "gain," as no investment was made to "earn" it.

The fact is that the government has no legitimate right to tax you upon your death for any reason other than you died; there was no creation of income, no capital gain, no investment pay-off and no new wealth as a result of dying.

Again, the dead is not taxed. Their estate is taxed. The entire idea of taxing the dead is ridiculous, unless to subscribe to some kind of Egyptian religion where you believe you can take your wealth into the afterlife.

Bane,

I agree. Also, don't forget the "easy credit" bubble and the ever so popular "housing bubble."

Dark-side economics may be found at www.safehaven.com. I know it's all about selling gold but I've discussed this with my money manager at #$ and they haven't been able to say it's going otherwise. Worse yet, when I got on their high level mailing list, they tend to agree. Word up!

P.S. There is no energy bubble. I know you think I'm a nut job but just think peak oil - it's real and it's here! We will never see cheap oil again. EVER! Think about what that will do to the world economy.

The instrument was purchased from proceeds already taxed, the death tax taxes the instrument upon transfer at full face value, then the new holder pays tax on the gains value when it’s converted. (Taxed as income first, taxed as inheritance second, taxed as capital gains third) So, by you own statement I’m not wrong. Thanks.

Now you are debating semantics? The substance is that the government has no right to my “estate” by virtue of my dying! My "investment" was taxed already, and the capital gains will be taxed upon realizing the gain. just like your "let's say I earn $20." each time the income is earned it's taxed once. (Your analogy would work better if each player wasn't also producing to earn the income.)

You're wrong, Bane. Under normal circumstances it would work like this:

1) purchase stock at price A
2) sell stock at price B
3) pay taxes on (B - A)

With an inheritance, it's like this:

1) purchase stock at price A
2) pass stock to offspring at current price B
3) sell at price C
4) pay taxes on (C - B)

The original gains, (B -A), are not taxed.

(Your analogy would work better if each player wasn't also producing to earn the income.)

EXACTLY MY POINT. The person getting the inheritance hasn't produced anything.

3,
By my definition, a “bubble” is when the item is priced beyond its utility. I’d be inclined to believe that oil is priced based on the speculative market, and that the price will be more in line with its utility come fall, no pun intended, it’s already falling in price. Conversely, I don’t see a housing bubble because, although there will be some correction real estate prices match the utility we have given it. Land is assuredly a finite resource.
Creative financing is a real problem with the economy; the availability of “easy credit” has always been a knife swinging over our heads, somehow the economy keeps chugging along just fast enough to outpace the dangers.

Bane, "somehow" doesn't last forever. You know this. There are many examples in history to remind us of this and I fear we are entering one of those "historical" moments. Again, just my opinion. I think you're sadly mistaken about the energy prices. We shall see...

Window,
But the person earning it did!

2) “pass stock to offspring at current price B” Offspring pays inheritance tax on value B! It doesn't matter what form the inheritance is in, the inheritor pays taxes on the value of the inheritance.

3,
Indeed, thanks for the discussion.

OF COURSE. Therefore, it is NOT DOUBLE TAXED. That was your point, wasn't it - that it's DOUBLE TAXED?

The same money is taxed as income first, taxed as inheritance second, taxed as capital gains third.
Argument has become circuitous, I’m going to dinner. Thanks for the discussion.

The same money is taxed as income first, taxed as inheritance second, taxed as capital gains third. Argument has become circuitous, I’m going to dinner. Thanks for the discussion.

Yes, this is going in circles... but the be clear...

I brought this up to illustrate that if the estate tax was eliminated, all that "B - A" income would never be taxed. You refuted me on that.

Apparently we had a communication problem here - but let's be clear - by advocating the elimination of the estate tax, you are advocating for all of those gains to be totally untaxed.

Blah blah blah. Here's the crux of the matter: Elinimating the "Death Tax" will cost the government hundreds of billions of dollars in lost tax revenue. Those billions will be added to our national debt, which continues to grow to record levels. The cost of the war in Iraq will reach one trillion dollars before long, but the Republicans still see the need to cut taxes for the wealthy during wartime. Right now, every American's share of the national debt is $28,104.80. Someone down the line will have to pay for that.

So the question is: Which would you rather have, a Death Tax on the richest one percent, or a Birth Tax on every single newborn child? The Republicans have made their choice.

Sceptre,
If the Death Tax is such a good idea, why not tax all inheritance? Or, like the other liberals, you only want to tax someone elses' money right?

Hey, I think it would be great if no one had to pay taxes at all. But, as it turns out, the government needs money to, you know, pay for stuff, like farm subsidies, prescription drugs, and wars. I would prefer that more money is taken from the very rich than the poor and middle class, that's all.

Window,
Without the Death Tax the value of the instrument is taxed as capital gains when the instrument is converted (c - a) by whomever owns it at conversion.
Maybe we are talking past each other, but here's my argument;

Money has two possibilities; incoming or outgoing. The various governmental entities have figured out ways to tax the money whichever direction it moves; incoming, or income is taxed via the income tax, outgoing or expenses is taxed as sales tax, use tax, excise tax, or hundreds of little taxes (look at your phone bill for some of the more creative methods). Congress figured out a way to tax income twice; Capital Gains Tax (CGT). The proceeds are taxed as income before invested, and the purchase of the investment, because it’s a 1:1 swap initially isn’t taxed until the instrument is converted or cashed out. The subject of the investment receives income, which is taxed and then passes the profit on to the holder of the instrument where the Government sees the gain on investment as another income stream and taxes it again. This is inherently unfair.

Death Tax works much the same way, the income and investments of the decedent were taxed when earned, and the gains taxed when realized. For no reason other than death, the entire asset catalogue is taxed again; think about that; the estate didn’t become invested again, it didn’t enter or leave any market again, it didn’t increase in value again but it gets taxed again. That is blatantly unfair.

Here’s an idea, since I’m not an Asian-American I propose that we tax all Asian-Americans a second time for every plant, shrub or tree they purchase. Asian-Americans are good gardeners, they have money, and I’m not one of them! Think of the revenues the Federal government can make off of this! Would that be fair? Is the stereotyping of Asian-Americans fair?

Those that leave assets to their “offspring” aren’t a monolith of greedy Republicans, they don’t all need “encouragement to make charitable contributions”, and they don’t all have useless children that will blow the inheritance in one generation. The simple fact is that the wealth is taxed and re-taxed and someone’s death is not cause for the government to make more money.

Finally, to all those that see a hole in Federal revenues, that complain that eliminating the Death Tax will “cost the government hundreds of billions of dollars” it’s not the government’s money in the first place. If you’re worried about the lost revenue, propose another tax cut; that always seems to raise government revenues (see: Laffer Curve.)

Bane,

Yesterday we were in agreement that the capital gains tax is on (C-B), not (C-A). You in fact mocked me for agreeing to you, on what was my original point.

If you want to claim it should be that way, I'm not going to argue, but that fact is that's not how the tax currently works. Again, if you eliminate the estate tax, the unrealized gains from the lifetime of the benefactor is not taxed ("B-A"). I'll leave you this one more source... but I'm getting tired of talking in circles. From here:

Both the radio and TV ads call the estate tax a "double tax," which is only partly accurate. It is true that some portion of a taxable estate might be made up of cash that was taxed before, when it was earned as income. But many estates are made up of stocks, bonds, real estate or other holdings that have appreciated greatly in value over the lifetime of the person who owned them. The owner didn't pay taxes on that profit during his or her lifetime because they weren't sold and the profits weren't turned into cash, or "realized." Furthermore, heirs who inherit such appreciated assets won't have to pay tax on that unrealized profit either. The estate tax is the only tax that applies to such unrealized capital gains. Furthermore, such unrealized, untaxed capital gains make up more than one-third of the average estate, according to a study by economists James Poterba of the Massachusetts Institute of Technology and James Weisbenner, who was on the staff of the Federal Reserve Board when the study was published in 2000. Weisbenner is currently at the University of Illinois at Urbana-Champaign . Their study estimated that unrealized capital gains made up 36.3 percent of the value of all estates in 1998. That would make the "double tax" claim 63.7 percent true, and just over one-third false.

Wyckyd,

Two problems with that - (a) the rich can afford the legal assistence to ensure that their assets remain largely untaxed and (b) if we confiscated very dime from the rich, we wouldn't be able to run our government for six months.

The money in this country is held by the middle class and that is why nearly all taxation actually falls on middle class people - and the rich who do get stuck with the bill are usually first generation working rich...

weeniehead asks me..."I don't know how many farmers you actually know.."

Well, there is me, and my father, and my uncles, and my brothers, and my cousins. There are my neighbors, and people I went to school with, and the people I do business with.

There is the majority of my community, and there are those I specifically mentioned in the San Luis Valley in Colorado.

Bane in particular has done his usual stellar job or presenting facts, so I will not go into the argument again, but I just have to repeat a point he made which is simply ignored by the class-warfare proponents of the Left:

"For no reason other than death, the entire asset catalogue is taxed again; think about that; the estate didn’t become invested again, it didn’t enter or leave any market again, it didn’t increase in value again but it gets taxed again. That is blatantly unfair."

Bane--do you know of a study which shows the immediate tax gain of a death tax vs the projected tax gain over time of having those assets remain with the heirs to produce an ongoing revenue stream? It just seems that the ability to control the inheritance in a way which would increase its value,and produce ongoing revenue, would end up being a larger tax source than merely going after the estate at death.

I think the arguments against that would be that the heirs would be able to use and benefit from the money left to them, and that they might even get richer by doing so. Clearly these are outcomes that must be avoided at all costs. Because it really is more about sticking it to the "rich" than fairness or a reasonable tax code.

And, Big Weenie, stop stealing other peoples' material. I forget which neorad fem came up with the Paris Hilton thing---Maureen Dowdy, perhaps. But it is not original, and you paraphrased it poorly, and it was mere demagoguery in the first place.

Well, there is me, and my father, and my uncles, and my brothers, and my cousins. There are my neighbors, and people I went to school with, and the people I do business with.

Well, if that's true then my apologies. I grew up in a farming community as well, and have family in Wisconsin and Colorado farming, so I'm not entirely clueless myself.

However, you didn't refute the numbers. The fact is farmers are not losing their farms because of the estate tax. Even in the event they have a sixable tax burden (very rare), they can eliminate most of it simply by stating their intent to operate the farm for at least 10 years. The remainder can be paid off over the course of decades.

"For no reason other than death, the entire asset catalogue is taxed again; think about that; the estate didn’t become invested again, it didn’t enter or leave any market again, it didn’t increase in value again but it gets taxed again. That is blatantly unfair."

Example 1: If I give you more than $5000, you pay taxes on that "income." Example 2: If you win the lottery, you pay taxes on the "income."

If you get a windfall inheritance, the estate is taxed. Not inconsistent at all.

Bane--do you know of a study which shows the immediate tax gain of a death tax vs the projected tax gain over time of having those assets remain with the heirs to produce an ongoing revenue stream? It just seems that the ability to control the inheritance in a way which would increase its value,and produce ongoing revenue, would end up being a larger tax source than merely going after the estate at death.

Unlikely, because the government will spend the tax revenue, putting it back into circulation (instead of circulating borrowed debt, which is money that could of been invested in the market). In the best case this would be equal to the effect of any growth as a result of spending. In the worst case the individual will invest overseas or in some other form horde the money.

And, Big Weenie, stop stealing other peoples' material. I forget which neorad fem came up with the Paris Hilton thing---Maureen Dowdy, perhaps. But it is not original, and you paraphrased it poorly, and it was mere demagoguery in the first place.

Um, I didn't say that, someone else did. And you really should stop with the name calling, it makes your "debate" sound like it's coming from a schoolyard.