Post #253,719
4/28/06 9:40:13 AM
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the income/equity has already been taxed once
leave it alone. I will never exceed the threshold but dont care, its a punitive tax.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,720
4/28/06 9:47:50 AM
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Disagree.
See, e.g., [link|http://z.iwethey.org/forums/render/content/show?contentid=219654|#219654].
Vast accumulated wealth that's passed on from generation to generation without taxation is a bad thing.
Cheers,
Scott.
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Post #253,724
4/28/06 9:53:47 AM
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There are many bad things in life.
On the one hand, government says "work hard! save money! give your kids a head start!" and on the other it says "fuck you, we're having half your stuff when you die".
Thought experiment: what would happen if we all lived forever?
As it happens, inheritance tax in the UK is a growth industry.
Avoiding it, that is. People simply disperse their estates (financially speaking) before they snuff it. At time of death, estate is below the threshold, and the government gets sweet fuck all - which is only right. "Just because you're dead" isn't a good reason to tax people.
Peter
[link|http://www.no2id.net/|Don't Let The Terrorists Win]
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Post #253,750
4/28/06 1:25:08 PM
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"They'll tax the pennies on your eyes" (new thread)
Created as new thread #253749 titled [link|/forums/render/content/show?contentid=253749|"They'll tax the pennies on your eyes"]
jb4
"Every Republican who wants to defend Bush on [the expansion of Presidential powers], should be forced to say, 'I wouldn't hesitate to see President Hillary Rodham Clinton have the same authority'."
— an unidentified letter writer to Newsweek on the expansion of executive powers under the Bush administration
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Post #253,725
4/28/06 9:54:22 AM
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hogwash, you think they sit around on piles of money?
Their dough is working on the street just like my dough. All you are doing is shifting conrol from the owners to the government introducing waste to a fairly efficient process.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,728
4/28/06 10:49:22 AM
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What is fair?
One person says that it is not fair to tax a wealthy person at a higher rate than a poor one. Another says that it is not fair to have a system designed to increase disparities between rich and poor.
The difference between those positions is how you fundamentally understand "fairness". Neither will convince the other on that basis.
However as a practical matter I prefer rules that help preserve democracy. And huge wealth disparities undermine democracy, so I like seeing rules that reduce egregious disparities. Since the estate tax does that, I'm for the estate tax.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,729
4/28/06 11:07:31 AM
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so if you get mugged its fair if you are rich?
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,730
4/28/06 11:10:56 AM
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It's income. Tax it.
-----------------------------------------
Impeach Bush. Impeach Cheney. Do it now.
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Post #253,731
4/28/06 11:13:30 AM
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Fair enough. As income.
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
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Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
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Post #253,732
4/28/06 11:23:27 AM
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income should be taxed, savings from income already taxed
should not.
thats excessive.
thanx,
bill
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Post #253,733
4/28/06 11:51:00 AM
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Exactly.
Peter
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Post #253,735
4/28/06 11:57:52 AM
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That is it in a nutshell.
Its double-taxation...and tell me one financial advisor that will tell you your retirement should be under $1M. While it >currently< might impact .25% (a stat I don't believe to be true, its too low), you've no idea the impact it has in teh tax planning stages in order for people impacted to AVOID the tax...because it simply makes sense to do so.
It is CHEAPER to pay gift tax (at income rates) on donations over maximum. There are annual deductions allowed to place finances in trust, etc.
The only people making money on this tax are the gov't on those who do NOT plan and the financial advisors who plan for everyone else.
Impact on family businesses? One very highly public example...and its largely speculation that this was the reason...is the case of Art Modell, owner of Baltimore Ravens. When the move from Cleveland occured, Art was in negotations with Cleveland to keep the team there. New stadium was committed and all things that most teams hold the city hostage for...but NO CASH.
Baltimore offered all of the above..plus a cash bonus that just happened to be approximately 50% of the teams market value at the time. The reason estate tax was thought to be involved, at this time Modell was very ill...and it was thought that this cash incentive was offered so that, in case he passed away, there would be enough cash reserves in the family to not force the sale of the team.
This is the single largest issue with the tax. While a Dale Carnegie or Bill Gates do not risk the going concern of their business, the impact of transfer tax on a business in value of 1 to 5 million (a high growth section of the economy) is nearly well over 100% even though the effective rate is only 50%. If a 2.5 million estate is willed to 2 family members and 1.5 million is in business asset value (fair market, not invested)...the fed takes 1.25 million..leaving the 2 family members a choice. PAY 250k to keep the business, or sell it...often at well BELOW market because the fed doesn't wait for you to come up with the cash.
It needs to go away...or be seriously modified to around the transfer of businesses as a going concern.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,736
4/28/06 12:34:41 PM
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Bah.
"Double taxation" is a specious argument. You pay sales tax on [link|http://www.irs.gov/publications/p510/ar02.html|excise tax] when you buy tires. That's double taxation too. Big deal.
It's incredibly easy to come up with specious arguments when talking about the "fairness" of taxes, IMO. "I don't like supporting the military. It's unfair that I have to pay taxes that go to the Pentagon!" Etc.
Taxes are the price of having a functioning government that protects the rights of all of us, enables society as a whole to progress economically, etc. Enough money has to flow into the government to do that in a sustainable fashion. Inheritance taxes are an important component because: 1) they raise a significant amount of money, 2) they can slow the rise of vast accumulations of wealth that persist for generations that can damage society. As TR said in a link in my earlier post, the wealthy have a great deal invested in society. They didn't get their wealth on their own - society provided the framework that made it possible. They have a responsiblity to give back to society to enable others to have similar or better opportunities.
People can and do argue about the appropriate and necessary level of taxation. That's fine. The threshold for applicability of inheritance taxes should be adjusted over time, and the rate should be examined as well. But comparing Joe Smith who has a $500k home, $500k in investments, and college funds for his 2.3 kids with the Mars or Walton or Kennedy or Rockefeller or Mellon or Ford or Heinz or [link|http://www.forbes.com/lists/results.jhtml?passListId=54&passYear=1996&passListType=Person&resultsStart=1&resultsHowMany=25&resultsSortProperties=-numberfield2%2C%2Bstringfield1&resultsSortCategoryName=worth|other family empires] when discussing inheritance taxes is disingenuous.
What about family farms and small businesses? It seems to me that ways can be found to transfer control or ownership of companies without busting up the farm or destroying small business. Why should it be more of an issue when farms are sold without death being involved?
For me, the more important issue is concentration of wealth - not necessarily having huge sums of money transferred to the US Treasury. It makes no sense to me that someone can build an empire in their lifetime and transfer it to their decedents or heirs and continue to have that concentrated wealth impact society for generations. We're not an aristocracy or plutocracy.
In sum: Small businesses and farms are different from family empires. Wealth should not be concentrated in vast amounts for generations. Reasonable inheritance taxes are a good thing. The wealthy need to give back to society. We can argue about what "reasonable" is, but just because some of the wealthy have found ways to avoid inheritance taxes does not mean that they should be abolished. Don't throw out the baby with the bathwater. "Mend it, don't end it!"
Cheers,
Scott.
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Post #253,738
4/28/06 12:46:24 PM
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how very marxist of you
"Wealth should not be concentrated in vast amounts for generations" So lets just kill all the rich people and their kids, worked in 1917.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,739
4/28/06 12:50:11 PM
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I don't think Teddy was a Marxist.
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Post #253,752
4/28/06 1:26:04 PM
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For those who don't understand that comment...
Teddy Roosevelt was the US President who introduced the estate tax in the USA, which was one of the things that helped bring to an end the first Gilded Age.
Any understanding of the history of that time underscores the point that excessive concentrations of wealth are bad for democracy.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,747
4/28/06 1:23:49 PM
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You have to have balance
Go back to [link|http://z.iwethey.org/forums/render/content/show?contentid=253728|http://z.iwethey.org...?contentid=253728] and you'll see that what I want is the preservation of democracy. While allowing incredible excesses of wealth to build up is bad for that, killing all the rich people is even worse.
I am not a Marxist.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,751
4/28/06 1:25:42 PM
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so advocating theft of private property to balance power is
democracy? What an odd notion.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,756
4/28/06 1:30:59 PM
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Yes, it is.
Democracy is rule by the people. Contrary to recent US propaganda, democracy is not the same as capitalism. Their interests align to some extent, but the alignment is not perfect.
One example of the misalignment is that excessive concentrations of wealth create small groups of people who have the motivation and resources to try to take over the country. Therefore it is in the interests of democracy to keep such concentrations from developing. However measures to do this must necessarily run counter to capitalism.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,771
4/28/06 2:06:23 PM
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Oh you mean national socialism, got it
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Post #253,781
4/28/06 3:00:51 PM
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Nice insult
Insults are for when you don't have any facts left, so I guess you're out of facts.
For the record, National Socialism was to democracy as the neocons are to freedom and justice. For a historical figure who closer represents the view that I'm presenting, look at Teddy Roosevelt. (You know, the guy who actually introduced estate taxes.)
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,782
4/28/06 3:16:41 PM
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not an isult just a description of what you want to do
Riches are yours for your lifetime only, then they are nationalized, that is a socialist idea practiced by a sense of the state or nation owns the fruits of your labor, you might not like the label but that is what you are describing.
now,
off to nawleans if the famdamily is ready.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,792
4/28/06 4:43:11 PM
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Then use another description
Your description just happens to be the name of the single most reviled political party in 20'th century European history. And you claim that it is just intended as a description.
Ri-ight. Pull the other one. It's got bells on.
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,910
4/30/06 7:23:22 PM
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well lets see, that party believed that all wealth was at
the forbearance of the state. The state could confiscate at will and did from selected members of society who they claimed were rich and were simply reclaiming those parts of the state which were wrongly collected by the jews. You are expanding on that. You do not beleive in private property, you think it is just a single generational loan from the government to the individual. To me that is very scary that so many people seem to think the same way. With attitudes like that it wont be long before the "why wait until they're dead" crowd comes in and takes it a step further. When they do that it wont be the wasp's they start with.
Your supposed reason is that we dont want a confiscatory aristocracy or religious body so you devise a scheme that is identical and held by political dynasties, no different from the european small states model in medeival times.
Then after you re-invent the wheel you loudly proclaim that this is different.
No, your goal is to ensure that only the National State Owns things and People. That was the heart and soul of National Socialism. Im sorry if it makes you uncomfortable but read the economic beliefs of that group and suspend your knowledge of their racial policies and you will see similarities to your economic belief system.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,915
4/30/06 7:46:30 PM
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You been taking rhetoric lessons from BeeP?
You do not beleive in private property, you think it is just a single generational loan from the government to the individual. I've been staying out of this because I see both sides of the argument, and I haven't yet decided where I will eventually weigh in on this. But, cripes, Box, he never said this, or naything like in the referenced post, or any other post I read of his. Such a blatant strawman argument is sucha complete turnoff, that any else reading this is most likely to give you a big "bullshit" and ignore that and any other argument you might wish to offer in support of your position. Let's try sticking to the knitting, OK? jb4
"Every Republican who wants to defend Bush on [the expansion of Presidential powers], should be forced to say, 'I wouldn't hesitate to see President Hillary Rodham Clinton have the same authority'."
— an unidentified letter writer to Newsweek on the expansion of executive powers under the Bush administration
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Post #253,921
4/30/06 8:13:34 PM
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Sorry Ben, Ascribed a quote from Todd to You
"Sorry man, while you live, you play and maybe win. When you die, it all goes back to the banker for the next round."
That is the Idea that there is no personal ownership of wealth, its a loan from the government. Now I do not expect to be hit when I die and my Ma had to scrub floors to pay off the old mans owes and doughs but I firmly believe that mismanages wealth shrinks not grows and a new better viking will inherit thru business cutthroatedness and I want a chance for my Kids to have a shot.
From observation I think it is 6 generations. New Wealth, growth, stodgy conservative, dissapation, growth. How is Mrs Ford and all the little Fords doing? 60 years they will be begging for a floor spot with the UAWSPD. United Autoworkers Space Division.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,927
4/30/06 9:16:20 PM
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I don't think that's the "banker" he meant
It sounded to me more like, "You can't take it with you."
===
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Post #253,929
4/30/06 9:22:44 PM
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maybe not but the freekin local squire with his hand out
shouldnt get shinola and all the posturing about, well we have to ensure... etc is that these people dont have a clue about what is MINE! Private! I already paid you fucks!
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,958
5/1/06 12:20:49 AM
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What are you gonna do with it
from a hole in the ground?
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Post #253,979
5/1/06 8:17:45 AM
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I think my kids could sqander as efficiently as a government
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,992
5/1/06 9:35:56 AM
5/1/06 9:36:23 AM
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Not spend it on invading Iraq, for one thing.
Peter
[link|http://www.no2id.net/|Don't Let The Terrorists Win]
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Edited by pwhysall
May 1, 2006, 09:36:23 AM EDT
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Post #253,957
5/1/06 12:20:19 AM
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It was a reference to Monopoly
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Post #253,963
5/1/06 1:49:59 AM
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The usual quote is "rags to rags in three generations"
A man is born poor but motivated, builds up a financial empire.
His sons never have to work and never learn how to. They piss away the fortune.
His grandsons are in rags again.
Great fortunes take longer to vanish, but the usual difference is that there gets to be several middle generations. If the fortune is large and the money is tied up in ways that the inheritors cannot readily waste, there might be quite a few such middle generations. The problem comes when someone gets the bright idea of manipulating the political system to make the wealth travel further. Then we wind up having to deal with someone like George III. (Pick either one - both were bad for America.)
About capitalism, I firmly believe that "wealth" and "ownership" are societally created ideas. It isn't that they are granted to us by the government, it is that both government and ownership are powerful fictions created by people. So if we're going to make up rules, I'd like to see rules made up that tend to do well for people.
Now the fact is that capitalism, for all of its shortcomings, is pretty darned effective. Therefore in general I'm a capitalist. However capitalism is not, for me, a root value. Therefore I'm in favour of deviations (eg taxes) from a purely capitalistic society if I see a lot of value in them. The idea of the estate tax is a deviation that I'm in favour of. (That said, I would like to see the level at which it kicks in raised.)
However I'm against interventions that I think bring bad consequences and no good results. For example confiscating everyone's possessions upon death would be a horrible idea because I believe that the government will generally handle that property less effectively than private owners will. Furthermore saying that that is OK far too conveniently leads to abuses from the people in power.
(Unfortunately, very few of my positions fit on a postcard...)
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,740
4/28/06 1:00:51 PM
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And you'll see me be very consistent
in any discussions I've had about pass-through excise taxes and government imposed "fees"...something I am involved in every day becasue of the 7.5% pass through on airline tickets, as an example. Don't like them, don't agree with them. Most are "hidden" so that the unsuspecting public doesn't understand that over 25% of that airline ticket you bought goes straight to the fed...nope...John Q Public thinks the airline gets all that money and can't understand why they all can't turn a profit.
Not a big fan of the layering of taxes at all.
In addition, the forced sale aspect of the estate tax either gets worked around or I'm all for throwing out the baby with the bathwater. Why, because Mars or Walton or Kennedy or Rockefeller or Mellon or Ford or Heinz will avoid paying the majority of their "fair share" by buying a nice, high priced, estate planner...while the guys that get blasted are the ones that can't afford such high priced talent when they're living.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,767
4/28/06 1:53:19 PM
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I see your Bah and raise you a Feh.
The whole pro-death-tax argument boils down to penalisation of the successful.
If I eat beans and sit in the dark my whole life, saving up almost every penny I earn (and being taxed on it already), why shouldn't my offspring reap those benefits without the gubmint taking nearly half of it, for no other reason than that I'm dead?
Just tax live people to an appropriate level. Death tax is simply a disincentive to prudence and success.
Peter
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Post #253,778
4/28/06 2:32:17 PM
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Wow, is that ever a 'well worn' arguement.
"Worn out" is more to the point. Now given my suggestion that the threshold be raised, and I'll accept Ben's figure of $20 million as reasonable, I'd like to see the guy who leaves more money than that who scrimped and ate beans all his life.
The overwhelming majority inherited enough to make a lot more the easy way. The ones that didn't likely (with the exception of a few celebrities and athletes) made their millions by deception, exploitation or outright fraud.
It's just become tiresome reading endless stories of "business geniuses" praised for making zillions of dollars with great new ideas and then reading about their convictions for fraud.
[link|http://www.aaxnet.com|AAx]
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Post #253,742
4/28/06 1:10:04 PM
4/28/06 1:22:02 PM
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Cry me up a river
I don't like nepotism at the best of times. Claims that a tax makes nepotism more difficult doesn't sound like a problem to me.
My view is that having a rich dad no more makes you deserve to have an easy life than having a poor dad makes you deserve to have a hard one. I take this point personally because I grew up in a family that had nothing but hopes. I can't really sympathize with people who think that it is too hard to pass millions on to their children.
Making it personal, if my son can't get an advantage in life from his ability, how he's raised and the education that he's going to get, then he doesn't deserve to have a good life.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
Edited by ben_tilly
April 28, 2006, 01:22:02 PM EDT
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Post #253,755
4/28/06 1:29:12 PM
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so having a rich dad is a detriment
because when he dies some fuck in washington, takes 1/2 yer old mans money and you are left homeless, thats very caring of you.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,757
4/28/06 1:34:04 PM
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What do you call having a poor dad then?
When a poor dad dies you don't get anything. When a rich dad dies you get enough money to pay the rent on a nice place for a few years.
It doesn't sound detrimental at all to have the rich dad.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,768
4/28/06 1:54:10 PM
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s/few years/rest of your life
At least, if you actually live like I do, instead of like some spoiled rich brat.
When somebody asks you to trade your freedoms for security, it isn't your security they're talking about.
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Post #253,772
4/28/06 2:08:15 PM
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I said a nice place :-P
However even if you change that you're probably wrong. After a couple of decades inflation, the money won't rent as much as it does now.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,773
4/28/06 2:08:35 PM
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whenever someone takes 1/2 of mine it gets detrimental
if the old fart cut me a check before he coughs then I pay 28%. Cause it was tied up in property and it didnt sell before he coughed I pay 50% I call bullshit, its the same pile of dough
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,776
4/28/06 2:14:11 PM
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It wasn't yours
It was your father's. The question is how much should transfer over to you.
As for "detrimental", I understand you to be arguing that having a rich parent is detrimental because you get hit with this tax. I'm pointing out that having a rich parent and getting hit with this tax still leaves you better off than having a poor parent and not. So on balance you're still better off having a rich parent.
Better off is not "detrimental" in my books.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,759
4/28/06 1:35:02 PM
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Please provide verifiable references . . .
. . to sons and daughters of the very wealthy who were left homeless by the estate tax.
[link|http://www.aaxnet.com|AAx]
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Post #253,784
4/28/06 3:44:53 PM
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:-)
Not an answer, but the image reminds me of the stories about [link|http://en.wikipedia.org/wiki/Hetty_Green|Hetty Green]: Her frugality extended to family life. Her son Ned broke his leg as a child, but Hetty took him away from the hospital when she was recognized. She tried to treat him at home, but the leg contracted gangrene and had to be amputated \ufffd he ended up with a cork prosthesis. My Ma is a billionaire and I only got this cork leg! Cheers, Scott.
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Post #253,796
4/28/06 5:40:39 PM
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Yeah, we had that in my family too.
My grandfater on my father's side was the town banker in New Britain Connecticut. My father's eyesight was extremely bad. He had to get eyeglasses from a charity organization because his dad wouldn't put up the bucks for them.
This guy used to walk home from the bank to his 3 story mansion (most of which was locked up the day after the decorating was done to save on heating costs). He'd stop by the butcher shop to see if the butcher had any meat that was starting to turn that he could get at a discount.
Of course college for any of the kids was totally out of the question.
I can't be too harsh on the old guy though. After dividing his estate a jillion ways from Suncay my grandchild share was $8000, enough to get me into the house I've lived in for 30 years now.
[link|http://www.aaxnet.com|AAx]
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Post #253,906
4/30/06 7:07:32 PM
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Andrew Jackson's Grandchildren
Roosevelt saw how wonderful reconstruction was for carpet baggers he extended it to a new generation.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,914
4/30/06 7:41:28 PM
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Eh?
[link|http://en.wikipedia.org/wiki/Andrew_Jackson|Wikipedia]: Jackson had two adopted sons, Andrew Jackson Jr., the son of Rachel's brother Severn Donelson, and Lyncoya, a Creek Indian orphan adopted by Jackson after the Creek War. Lyncoya died in 1828 at age 16, probably from pneumonia or tuberculosis.
[...]
In his will, Jackson left his entire estate to his adopted son, Andrew Jackson Jr., except for specifically enumerated items that were left to various other friends and family members. Jackson left several slaves to his daughter-in-law, and grandchildren. Jackson left a sword to his grandson, with the injunction, "that he will always use it in defence of our glorious Union." [link|http://www.thehermitage.com/hermtg_history/hermtg_property/decline/content.htm|The Hermitage] fell into decline after Jackson's death, but they don't mention estate taxes or any other tax problems. Do you have a link? Thanks. Cheers, Scott.
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Post #253,918
4/30/06 7:59:23 PM
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When I was at the Hermitage I saw info that had the begats
living in frugality in California and the folks that currently have it saved it from being broken up for taxes.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,816
4/29/06 1:05:57 AM
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Its a tax on *personal* wealth
I don't buy the business shit. Incorporate if its a problem and gift the stock.
Furthermore, the tax only occurrs once per generation and doesn't kick in until you're worth $2 million buck AFTER all expenses, charitable bequests, and bequests to spouse.
"The estate tax is not a death tax and it is not paid by the dead. It is a tax on the transfer of wealth and is paid by the heirs; it comes out of the estate before distribution. Currrently, the tax applies only to taxable estates over $1.5 million, that is, estates over $1.5 million after debts, final expenses, charitable bequests and bequests to a spouse have been subtracted. Because an unlimited amount may be transferred tax free to a spouse, the tax is typically paid only once a generation, when the second spouse dies. "
Even Wm Gates II thinks repeal of the estate tax is BS.
"Special rules allow family farms and businesses to further reduce or defer estate taxes. Of the 18,800 estates that filed returns in 2003 (out of approximately 2.4 million people who died), only 440 consisted primarily of family farms or businesses. (Center for Budget Policies and Priorities.) At the $ 2 million exemption level which takes effect next year, this will drop to 210 estates. Thus, the idea that large numbers of families will be forced to sell farms or businesses to pay the estate tax is a myth."
My source: [link|http://thenexthurrah.typepad.com/the_next_hurrah/2005/09/why_america_nee.html|http://thenexthurrah..._america_nee.html]
Perhaps your example is one of the edge cases. So what? You can't please everybody all the time. Nothing will be fair to everybody. Looks like a pretty small set of victims. I'm OK with it.
[link|http://www.blackbagops.net|Black Bag Operations Log]
[link|http://www.objectiveclips.com|Artificial Intelligence]
[link|http://www.badpage.info/seaside/html|Scrutinizer]
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Post #253,828
4/29/06 11:17:26 AM
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Small set of victims is larger than the set your after.
Its a poorly conceived, poorly written and woefully unfit for the task piece of legislation. I would rather see it scrapped than continue in any form.
I'll take my chances on being a surf to Sam Walton's kids.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,830
4/29/06 11:34:17 AM
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s /surf/serf/ "Surf's up at Wal-Mart!" :-)
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Post #253,831
4/29/06 11:52:20 AM
4/29/06 11:58:08 AM
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I disagree on how good it is
The estate tax has done a pretty good job of what was supposed to do, and has aged reasonably gracefully. And I say this despite personally knowing people who have been adversely affected by this. (My sister-in-law's parents owned a house on the Jersey Shore which, well you know the scenario.)
I know you disagree on how graceful it is, but considering how many decades it has been around, I'm impressed. According to [link|http://www.faireconomy.org/estatetax/ETHistory.html|this] it settled on its current form in the mid-30s. Compare that with another specific tax on the wealthy which was introduced much later. Which tax do you think does its original job with less collateral damage today, the estate tax or the AMT? Is there any real comparison?
Furthermore I think that fixing it is pretty easy. Just raise the bar for who is affected and make that be indexed to inflation. (I'd also want to increase the rate on the taxed amount, but leave that debate for another day.)
By contrast my big fear is that the United States will devolve into a plutocracy. In fact to a good extent it already has (what portion of federal politicians have great inherited wealth?), and I'm therefore against any change that could accelerate that trend.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
Edited by ben_tilly
April 29, 2006, 11:58:08 AM EDT
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Post #253,846
4/29/06 11:42:00 PM
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not if you measure in dollars
And this family farm shit? There hasn't been a single family farm lost to the estate tax that would have been saved by the new cuts.
Sorry man, while you live, you play and maybe win. When you die, it all goes back to the banker for the next round.
[link|http://www.blackbagops.net|Black Bag Operations Log]
[link|http://www.objectiveclips.com|Artificial Intelligence]
[link|http://www.badpage.info/seaside/html|Scrutinizer]
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Post #253,737
4/28/06 12:39:27 PM
4/28/06 12:41:48 PM
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Look at it from the child's point of view
When someone dies and leaves something to me, I didn't have money and now I do. How is that not income for me?
If my father hires me and pays me money, he can't just say, "Oh, he's my son, this isn't really income." I'm an employee like any other. The government is nice enough to allow him to give me a certain amount of money is tax-free (though that's not supposed to be used in an employment situation), but if I'm getting a real salary, I have to pay real taxes on it.
If my father doesn't hire me but just gives me money, the same holds.
What is the difference in principle if the reason for my getting stuff is that he died?
Cheers,
Ben
PS Edited to make it entirely from the child's point of view.
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
Edited by ben_tilly
April 28, 2006, 12:41:48 PM EDT
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Post #253,741
4/28/06 1:03:30 PM
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Difference is, when you get that income
by earning it, you pay 28%. If he gives you the house...you pay 50% and you got no cash. If that house is on Long Island...lets see you come up with $1Million to keep it.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,744
4/28/06 1:15:32 PM
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So I don't keep the house, big deal.
Why do you think that I have an inherent right to have a nice house on Long Island? I'm going to sell that house, pay taxes, and I'll still have money left over. Given that I actively want to have undue concentrations of wealth broken up, I don't see this as a particularly bad outcome.
Anyways the rates aren't the key point here. I was addressing boxley's complaint that the government has no right at all to tax that money.
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,754
4/28/06 1:29:03 PM
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Easy
Difference is, when you get that income
by earning it, you pay 28%. If he gives you the house...you pay 50% and you got no cash. If that house is on Long Island...lets see you come up with $1Million to keep it. That is what trust funds are for. What you are saying there is a trivial variation of the "farming family forced to sell their farm because of taxes" story. But like the farming family story it doesn't hold up. It is like the "welfare mom driving a cadillac" story. Everybody repeats it, but nobody can prove it. It is essentialy an urban myth, but one intentionally drafted to make a political point. Jay
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Post #253,769
4/28/06 2:04:28 PM
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Since you've never had this happen to someone you know
then it must be urban myth.
What happens if you are living in that house, caring for your parent?
How "far fetched" is this example, really? Think about that now that real estate has become, by itself, something that will likely push estate values over that $1M exemption.
Business/home sales at Jersey shore are often the result of death in family. These are places that have been in the family for years...and cannot be kept because the family can't afford to pay 50% of "fair market" to keep it. This is NOT a bunch of rich, Rockefeller types...just a bunch of working class Philly folks that happened to get in when it was affordable and want their kids to have the same summertime fun that they had growing up. Sold, torn down, big developer builds condos and rents them to the rich people you're after...closing out one more family's shore vacation for the year.
Nope, to important to nab Bill Gate's fortune. If it happens to step on thousands of other necks in the process...oh well.
Yep, its so uncommon they have articles about it in [link|http://www.tahoedailytribune.com/article/20060329/NEWS/103290041|Lake Tahoe newspapers]. It must be urban myth. My guess is that your opinion might change the first time you are involved in settling an estate.
Point being, if you want to hit the top 1%...then you better make damned sure that the limits set are done so that you GET that crowd...and not a huge bunch of "collateral damage" at the same time.
I do NOT necessarily support the full repeal...however I find myself on that side of the fence simply because I don't think Washington can come up with a good compromise.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,774
4/28/06 2:10:27 PM
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Compromise suggested
Raise the size of the estate that triggers it to $20 million next year, and then keep it indexed to inflation thereafter.
Good enough?
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,779
4/28/06 2:40:36 PM
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Don't know about New Jersey
I don't know about New Jersey, but in PA the question is about family farms. And despite the story floating around for some time and several organizations looking for stories to publicize, nobody has ever found anybody that actually lost their farm due to estate taxes. I'll admit the problem is probably harder for other businesses then for farms, because in many cases even if you can't borrow the money or otherwise come up with it you can sell part of a farm. For a lot of other small businesses it would be an all or nothing prospect. [link|http://www.washingtonpost.com/wp-dyn/content/article/2005/07/23/AR2005072300741.html|Washington Post] The numbers that owed estate tax, the CBO found, were paltry, and the number without enough cash on hand to pay the bill even punier: In 2000, for example, just 1,659 farm estates had taxes due, of which 138 didn't report enough liquid assets to cover their tax liability. And note that isn't 138 that lost their farms, that is 138 nation wide that didn't have enough cash on hand to pay it immediately. I would agree that $1 million is too low a level for this tax to hit. Like most rates, the government set a fixed rate and doesn't adjust for inflation until enough people complain about it. Given what I have seen I would say $5 million or $10 million would be a better base line. Jay
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Post #253,783
4/28/06 3:18:00 PM
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Selling part of a farm
PERMANENTLY damages the farm itself. It becomes less of a viable venture.
Imric's Tips for Living
- Paranoia Is a Survival Trait
- Pessimists are never disappointed - but sometimes, if they are very lucky, they can be pleasantly surprised...
- Even though everyone is out to get you, it doesn't matter unless you let them win.
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Nothing is as simple as it seems in the beginning,
As hopeless as it seems in the middle,
Or as finished as it seems in the end.
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Post #253,787
4/28/06 4:29:46 PM
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Lovely use of statistics
ONLY 1659 estates had taxes due and ONLY 138 were FORCED to borrow to pay taxes (9 months to come up with cash is the law).
So, on a venture that doesn't make alot to begin with, 138 last year were forced into MORE DEBT to maintain themselves.
All so you can "sock it" to the rich guys.
How about we throw in how many total farm estates there were so we could get a percentage of the total?
That might make that stat a little less comfortable for those trying to turn this into an urban myth. And all you have to do is look in the South Jersey papers to see the impact around here.
But, heck, its only a tradition we're squashing so we can "fairly tax" Bill Gates.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,794
4/28/06 5:25:24 PM
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Figures where for 2000, current rate is lower.
The figures I mentioned where for 2000, the current tax rate is lower and the exemption higher.
The underlying report is here: [link|http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf|CBO EstateTax.pdf]. I'm sure the figure your looking for is in there some place, I don't have time to read through it right now.
Jay
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Post #253,798
4/28/06 6:34:26 PM
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Re: Figures where for 2000, current rate is lower.
For farmers, business assets made up a much larger proportion
of estates\ufffd wealth: 51 percent in 1999 and 43 percent
in 2000. Liquid assets made up a smaller, but still
substantial, share of their estates: just over 40 percent in
both years. That smaller proportion of liquid assets suggests
that estate taxes may be more likely to exceed liquid
assets for estates of farmers, potentially requiring estates
to liquidate other assets. However, farm estates are generally
small, and the estate tax therefore consumes a smaller
percentage of the gross estate (an average of 11 percent
and a median of 9 percent in 2000). In fact, tax data
show that in 1999, about 12 percent of farmers\ufffd estates
that owed estate taxes faced a liability greater than their
liquid assets. In 2000, the corresponding figure was 8
percent.
That situation is more pronounced for estates claiming
the QFOBI deduction. Business assets made up at least
75 percent of those estates\ufffd wealth, on average.30 In addition,
the average tax owed was a higher percentage of the
gross estate for those estates than for estates in general (14
percent compared with 13 percent for all estates filing
returns). As a consequence, one-third of estates claiming
the QFOBI deduction and owing taxes in 2000 could
not pay the estate tax out of their reported liquid assets.
As before, the fact that liquid assets do not include some
trusts means that that figure represents the maximum
number of estates with insufficient liquid assets to pay the
estate tax. So, of those farmers forced to file, about 10% of them were charged taxes IN EXCESS of liquid assets. And for small business, that number was 33%. Of course, soften the effect for the readers by saying "Maybe they had money socked away somewhere else to soften the blow". This is lifted straight out of the report. So, if you are a small business and you happen to be in the valuation range...1 in 3 shot puts you in the "forced sale" category. If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,785
4/28/06 4:03:23 PM
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Latest numbers and info from the IRS.
[link|http://www.irs.gov/businesses/small/article/0,,id=98968,00.html|Linky]: The annual exclusion for gifts is raised to $12,000 beginning in 2006
The applicable exclusion amount is increased to $2,000,000 for estates and remains at $1,000,000 for gifts
[...]
Most gifts are not subject to the gift tax and most estates are not subject to the estate tax. (Only about 2% of all estates are subject to the estate tax). For example, there is usually no tax if you make a gift to your spouse or a qualified charity or if your estate goes to your spouse or qualified charity at your death. If you make a gift to someone else, the gift tax does not apply until the value of the gifts you give that person is more than the annual exclusion for the year.
[...]
The person who receives your gift or your estate generally will not have to pay any gift tax or estate tax because of it. In addition, that person will not have to pay income tax on the value of the gift or inheritance received. NOTE: There are some technical applications for "Income in Respect of Decedent" under \ufffd691 that will have to be considered for income earned but not otherwise taxed prior to the date of death.
[...] IOW, you can give $12,000 per year to someone without any tax implications. You can, over your lifetime, give away $1M without any tax implications. Estates smaller than $2M at death are not taxed. The recipient is not taxed - the estate is. It's hard for me to get riled up about 2% of estates being subject to estate taxes. YMMV. The maximum estate tax rate is 47% [link|http://www.irs.gov/pub/irs-pdf/i706.pdf|Form 706 Instructions]. It's graduated from 18% (for taxable amounts over $10k), to 47% (for taxable amounts over $2M) - Table A. As Ben has said, we can argue about where the tax should kick in and how high the tax rate should be. But the tax serves a useful purpose and should be retained for large estates. Cheers, Scott.
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Post #253,793
4/28/06 5:08:32 PM
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Estate tax level is current wacky
The estate tax is currently going through a wacky cycle based on a bit that was part of Bush's tax reduction thing a few years ago. Every year until 2009 the tax rate goes down and the point where it kicks in goes up. And that is before getting into the real nitty gritty. There are a bunch of special exceptions and tax modifiers that only apply in certain cases.
Then in 2010 there is no estate tax at all. But then in 2011 it jumps back to where it was in 2002. Bush did that with several taxes so he could claim they wouldn't have huge long term effects.
You can see the general details on [link|http://en.wikipedia.org/wiki/Estate_tax|Wikipedia].
I fully expect something will be done at some point to make some sense of this.
Jay
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Post #253,817
4/29/06 1:10:05 AM
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Re: Since you've never had this happen to someone you know
"What happens if you are living in that house, caring for your parent? "
Eh? So dad dies and mom is still in the house? Doesn't apply. The tax doesn't kick in until she dies.
"Currrently, the tax applies only to taxable estates over $1.5 million, that is, estates over $1.5 million after debts, final expenses, charitable bequests and bequests to a spouse have been subtracted. Because an unlimited amount may be transferred tax free to a spouse, the tax is typically paid only once a generation, when the second spouse dies."
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[link|http://www.badpage.info/seaside/html|Scrutinizer]
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Post #253,827
4/29/06 11:12:14 AM
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Try..
...so dad's already dead and mom dies. In the northeast and now in northern california...simple ownership of the house with no mortgage puts you over that limit with 0 cash. So, own the house and live on a pension...parent dies and the tax bill is 750k. You have 9 months to sell and pay...or penalties start.
The limit is too low in todays market by a MAJOR amount.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,832
4/29/06 11:55:15 AM
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Nota bene
The exemption is such that it needs to be changed according to region; what is reasonable in one place (say Arkansas) might be ridiculously low in another (say LA).
The logical way to do that would be to calculate it by postal code or some such (er, zip code I guess for you guys).
That said, I think the inheritance tax is a Good Thing; while it may not seem ideologically reasonable, practical experience shows that it does what it's supposed to do and does it well (cf- Gilded Age).
--\n-------------------------------------------------------------------\n* Jack Troughton jake at consultron.ca *\n* [link|http://consultron.ca|http://consultron.ca] [link|irc://irc.ecomstation.ca|irc://irc.ecomstation.ca] *\n* Kingston Ontario Canada [link|news://news.consultron.ca|news://news.consultron.ca] *\n-------------------------------------------------------------------
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Post #253,842
4/29/06 8:56:24 PM
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All true, but that's a different problem
I like the European solution someone has mentioned here. Banks will finance a give property for the same amount no matter where it happens to be. This puts a serious brake on real estate speculation.
Taking some of the excessive valuation out of the market solves several major problems, and makes others more manageable. How to get there without screwing all the people currently sitting on monster mortgages is the hard part.
===
Purveyor of Doc Hope's [link|http://DocHope.com|fresh-baked dog biscuits and pet treats].
[link|http://DocHope.com|http://DocHope.com]
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Post #253,845
4/29/06 11:40:20 PM
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Mortgage or move
that's life. My dad was in hock up to his ass when he died. I expected (and got) nothing. What of it? I didn't get his boat, his car, or his house. How am I hurt by the estate tax? None of it was mine, none of it was owned free and clear anyhow, and all of his savings was eaten by long term medical bills.
I don't have any sympathy for your hypotheticals. I'd like to see it ramped way up and used to pay for universal health care equal to what the congressmen get.
[link|http://www.blackbagops.net|Black Bag Operations Log]
[link|http://www.objectiveclips.com|Artificial Intelligence]
[link|http://www.badpage.info/seaside/html|Scrutinizer]
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Post #253,863
4/30/06 10:55:11 AM
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Interesting take
Alot more extreme than I would have expected of a father. This is not a dig...your view is clear...I'm just wondering if it may mellow as you and family age gracefully.
The small business thing is real...whether you want to recognize it or not. Restaurants are a huge example in Philly. Mom and Dad open...all the kids work it and when the last parent dies the kids have to close and sell the building to MAYBE make the tax payment because the limits are so low.
In these cases it goes against damned near every core value most people want to protect.
Again, I'm ok with docking half of Sam Walton. The leftover half would make all his kids very comfortable forever. I'm completely against the collateral damage that happens all the time...and at current levels is REALLY going to start showing now given real estate valuation.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
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Post #253,873
4/30/06 12:41:41 PM
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So take Ben's solution.
Bump it up to $20mil, then index to inflation.
When somebody asks you to trade your freedoms for security, it isn't your security they're talking about.
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Post #253,887
4/30/06 4:33:08 PM
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I have no intention
of building a legacy for my kid to inherit. If she wants to make it, she'll make it on her own. I'll help her, sure. But I'm not busting my ass so she can sit on hers.
Typically, rich kids don't generally do as well as their parents. Observe Paris Hilton for instance. One might suspect that this may be partially caused by them figuring they'll inherit it all anyhow so why put in the effort.
There are mechanisms for transferring business interests that can avoid the inheritance tax. For instance, if the restaurant is truly a family business, then the kids can gradually take it over via vesting agreements.
I also agree that the threshold could be made - oh $5million to pull a number out of the air - to fix the edge cases you cite.
[link|http://www.blackbagops.net|Black Bag Operations Log]
[link|http://www.objectiveclips.com|Artificial Intelligence]
[link|http://www.badpage.info/seaside/html|Scrutinizer]
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Post #253,748
4/28/06 1:24:16 PM
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why should you have to pay %50 taxes because your
parents died instead of giving it to you. Doesnt sound very equitable to me.
thanx,
bill
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,770
4/28/06 2:06:20 PM
4/28/06 2:06:43 PM
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simple, your parents had more money...that makes it fair.
If you push something hard enough, it will fall over. Fudd's First Law of Opposition
[link|mailto:bepatient@aol.com|BePatient]
Edited by bepatient
April 28, 2006, 02:06:43 PM EDT
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Post #253,788
4/28/06 4:33:07 PM
4/28/06 10:01:38 PM
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Does your father(s estate) get to write off the expense?
I'm not arguing or making a sarcastic point. But it seems if we're going to treat money I receive from my father as income, then it should be reported as an expense on his ledger, and deducted from taxable assets.
Hold on, I just realized how wrong that is. We always talk about taxing your assets when you die. What's really happening is we're taxing the person or people receiving the assets.
But that suggests a way to keep the money in the family: Incorporate a holding company, capitalized in the amount of your entire assets. Give complete control of that corporation to your heirs. They don't really own anything, the corporation does. They get to live in the properties of which they are the caretakers. They get to wield that financial influence as if it were theirs, but technically no one owns it. ... Something tells me I'm not the first one to think of this.
===
Purveyor of Doc Hope's [link|http://DocHope.com|fresh-baked dog biscuits and pet treats].
[link|http://DocHope.com|http://DocHope.com]
Edited by drewk
April 28, 2006, 10:01:38 PM EDT
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Post #253,809
4/28/06 10:27:14 PM
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I know someone who did it.
Not as a company, but as a "Foundation".
All people in the family are members.
Foundation pays the bills.
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Post #253,810
4/28/06 10:34:33 PM
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I know multiple people who've done that
The first one who ever mentioned doing that, though, was a CFO. Coincidence? I bet not! :-)
Cheers,
Ben
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,815
4/28/06 11:04:37 PM
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That's a little different, as I understand it.
[link|http://www.bizforward.com/wdc/issues/2002-09/money/foundation.shtml|Linky]: There are many financial instruments families can set up to handle chunks of charitable change, and the family foundation isn't the simplest of them. Creating a family foundation requires appointing a board of directors, holding meetings and taking minutes. The foundation has to file its own taxes and register as a 501c(3) nonprofit corporation. It doesn't have to have a full-time staff, just someone willing to watch the books. But depending on the mission, foundations can be manned by a small army. The hassle is enough to deter the faint-hearted, experts say. Financiers instead often will direct their philanthropically minded clients to what is called a donor-advice fund, a sort of charitable mutual fund. Donors contribute to a fund managed by a larger organization. When the donor wants to give to a charity, he or she asks the fund manager to cut a check. The fund manager has the power to veto such requests, because the Internal Revenue Service requires that donors not have total control over the money. But a veto rarely happens, and the donor-advice fund makes sense for anyone who has less than $1 million to put into such a fund, says Bessemer's Shelly.
Only once the available amount exceeds $1 million - and many experts prefer the number to be closer to $5 million or $10 million - do financiers consider creating a family foundation. At that point, the cost and hassle become minimal relative to the value and mission of the fund. Having a foundation allows much more choice over how much money is given and to whom. "Younger philanthropists are more interested in outcomes and being able to measure whether their money made a difference," Dakin says.
But it's the difference in degrees of control and the notion of legacy that appeal to people who start a family foundation with less than the recommended $1 million. "If you have an accountant, the accountant can set it up," Hundt says. "No one can cite the hassle factor as an excuse for not doing charity."
There are rules, of course. Donors can deduct cash gifts up to 30 percent of their adjusted gross income (AGI) each year. When donors contribute appreciated stock, they can write off the total value of the stock, even if they bought it for $2 a share and contributed it at $400 a share, up to the limits. And all assets given to a foundation in a will are fully deductible, helping to reduce federal estate taxes substantially. Foundations must give away at least 5 percent of the fund's value each year. I remember that last bit whenever I hear a glowing story about how much the [link|http://www.gatesfoundation.org/MediaCenter/FactSheet/default.htm|Bill & Melinda Gates Foundation] gives away. If you compare the annual giving with the endowment you see it is, you guessed it, 5%. A family foundation wouldn't be a good choice for those who just want to shield assets from the IRS, IMO (but note that I'm not a tax adviser, etc.). An [link|http://www.nolo.com/article.cfm/objectID/2D207FE3-B4EC-4599-BE0A3981C99F0D10/309/227/ART/|AB Trust] might be a better choice for upper-middle class families, but note the caveats. Also note that lots of people think that some sort of trust is always needed to avoid probate. At least in [link|http://www.fairfaxcounty.gov/courts/circuit/probate.htm|Virginia], probate isn't needed in many common cases even without a trust, e.g., if there's a valid a "self-proving" will and if all property is owned jointly with your spouse. Setting up the paperwork for my inlaws was just a few hundred dollars with a lawyer who specializes in such things. Cheers, Scott.
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Post #253,907
4/30/06 7:10:52 PM
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Its called a living trust came into being with the ERISA law
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 50 years. meep
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Post #253,753
4/28/06 1:26:20 PM
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This tax was deliberately confiscatory when introduced.
The objective was to prevent the formation of hereditary wealth such as was seen in Europe where a few families owned vast expanses of the land and wealth disparity was extreme.
Once a few families have that wealth they are almost impossible to unseat because they use the wealth to control the government, just as we see these 18 families doing today.
I agree with the tax and the reasons for it. What I do not agree with is the low threshold currently in place which can be damaging to small business and farms. The threshold needs to be raised a few million dollars because of inflation and current valuations.
[link|http://www.aaxnet.com|AAx]
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Post #253,758
4/28/06 1:34:21 PM
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I'd agree with that
I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
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Post #253,818
4/29/06 2:50:52 AM
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She's got vast... tracts of land.
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