you can't take it with you!. . .Warren Buffet says keep the estate tax. . .

[raz]

[quote DharmaDog][quote raz]The topic at hand is the Estate Tax
[quote raz]Live gifts get taxed after the first $10K per giftee.
So are we talking Estate (Death) Taxes or Gift Taxes. Not the same thing, nor does the IRS think so. Again, let's take one tax at a time. BTW, the Gift Tax allows up to $12k now. WooHoo!
I am comparing the two. In my mind, I do not see any difference between a bequest from a living donor and a bequest from a dead one. Both are transfers of property, and are eligible for taxation.

[quote DharmaDog]
[quote raz]Excluding the first $2M of an estate should take care of the immediate dependents' needs.
That's not the issue. Throwing the family a bone of $2 million, $20 million or $200 million doesn't entitle the government to any of it. It's already been taxed. They already got their share.
and

[quote DharmaDog]

At the end of the day, it's very simple. It's not the government's money. It's not the public's money. It's not your money (unless we are talking about you of course). It's not even that big of a tax revenue generator in the grand scheme of things. It's simply a way to make people feel good for "stickin' it to the rich." Nevermind the top 10% (those with incomes over $103k) already pay 70% of all income taxes. And the bottom 50% pays only 3% of all taxes.
There is nothing in the notion of taxes that prevents taxing the same property multiple times. Your net (after taxes) income is subject to sales taxes, and if you give more than $12K to someone, they pay taxes.

I've been trying to avoid the stick it to the rich argument as it usually degenrates into class warfare. However, it should be noted that the poor don't have as much disposable income, so taxing them is not terribly effective.

[quote DharmaDog]
Equating the Death Tax to the Gift Tax doesn't hold. Saying the fact that other parts of the tax code are unfair or unjust as a justification for the Death Tax doesn't hold. Saying that, well, $2 million should be enough for the immediate family's needs, so let's take nearly half of what's left doesn't hold.
Those are three empty assertions.

You have not addressed my points equating the two taxes. You have not produced any proposals for replacing the revenue lost by the Estate Tax or by changing the exclusion.

[raz]

[quote Will Collier][quote raz][quote Will Collier]Buffett loves the death tax, and no wonder: a sizable chunk of his own business was built by swooping in and buying family businesses for a song after the founder died and left the family with a huge tax bill.
Citation, please?

[quote Will Collier]Another giant part of his business is life insurance, which is used as a hedge against the death tax.
Demonstrably untrue on many levels.

Life insurance is primarily a vehicle to protect one's dependents in the event of a loss of income - in this case by death. If one has sufficient assets, life insurance is unnecessary (or less necessary).

Also, Berkshire Hathaway's first holding (General Re) is a insurance company's insurer. At best, Buffet would be one level removed from your assertion. In practice, I doubt that Life re-insurance plays a significant part of General Re's portfolio - let alone Buffet's.
Just to name three businesses of many, Buffet bought Ben Bridge Jeweler (Seattle-based chain), Dairy Queen and the Buffalo News (newspaper, one of Buffet's early cash cows in the 1970's) when the founders (or in the case of DQ, a major stockholder) died and the heirs needed cash to pay off Uncle Sam. In all cases, he used the tax emergency to squeeze the heirs for a sweetheart deal.

You're neglecting to mention Berkshire Hathaway Life Insurance, which is one of Buffet's directly-owned companies. If you don't think life insurance policies, especially pricey annuities, aren't used to pass on wealth (life insurance payments aren't taxable), you need to learn more about life insurance.
Thank you.

[Robert M]

Raz,

And gifts ought not be taxed. Plain and simple. That and if individuals like Buffet and Gates and, based on your statements, you, who support the tax prefer to have the government take a significant chunk of the money they leave behind, then that is their and your choice. The beliefs they and you hold should have no bearing whatsoever on what happens to my estate upon my demise. None.

Robert


P.S. I look forward to seeing how a politician will respond to the following statement.

Politician X, why, do you support the estate tax? Isn’t it the equivalent of saying, “Your father passed away and you owe the government money as a result of his death. Pay up.”

[DharmaDog]

RE: multiple taxation
Sales tax is not a federal tax. Bad example.

RE: gift tax
Again with the gift tax. It is not the same tax, the circumstances are different, The IRS doesn't consider it the same tax or treat them the same way. I don't know how to make that any more clear. I'll ignore further references to the gift tax as it has nothing to do with the death tax.

RE: class warfare
I agree, that the "sticking it to the rich" sentiment can lead to a discussion of class warfare, but supporting the death tax seems to be supporting just such a thing because it is targeted generally at a certain class of people and for no other reason that they MAY have the ability to pay it.

RE:empty assertions
I don't see how they're empty. The gift tax IS NOT the death tax. Using the 'unfairness' of other parts of the tax code as justification for more 'unfairness' is asinine. And lastly, who is the government to say what amount of an estate is appropriate for the family's needs? It's not the government's money.

RE: replacing revenue
It amounts to a whopping ~1% of tax revenue - $22 billion out of $2.15 trillion in 2005. Why should this revenue be replaced? How about cutting spending? Defense spending would be a great place to start. How about cutting pork barrel projects. The war on drugs?

The government is not infallible. They make mistakes. We should be working to correct those mistakes, rather than simply figuring out how we can give them more of the money we work for to make those mistakes worse and create other mistakes. Throwing more money at the problems probably won't solve them. It just creates more waste, for which you seem all too happy to make others pay.

[raz]

[quote Robert M]Raz,

And gifts ought not be taxed. Plain and simple.
Didn't we deal with this strawman already?

[quote Robert M]
P.S. I look forward to seeing how a politician will respond to the following statement.

Politician X, why, do you support the estate tax? Isn’t it the equivalent of saying, “Your father passed away and you owe the government money as a result of his death. Pay up.”
Removing political obfuscation, the response is that transfers of wealth are taxable events.

[Robert M]

Raz,

And your response doesn't negate my assertion in any way shape or form. Your response simply supported what I consider legalized theft by the government.

Robert

[RgrF]

Why does the "Death Tax" squad not see that assets distributed from an estate are income for the recipient? Income is taxed, not at the source, but at the end and so should inheritances.

Forget the Estate Tax, tax it as ordinary income (that's what it is) and let the beneficiary pay tax on that income.

[Robert M]

Rgr,

I understand that concept. I just disagree with it. The various forms of income are not equal and an estate is a type that ought not be taxed.

Robert