Machiavelli Wrote:This gets back to a flat tax. No exemptions for anybody except people at or near the federal poverty rate. Hell you could even index it by region. I suggest making it a sales tax. A national sales tax.

Get rid of the IRS and the cottage industry of tax preperations.

now this is something we agree on and as a sidenote if you are a "privacy" person they biggest invader of privacy is the IRS.

something you probably do not agree with however, I think they need to get rid of most of the social programs the Feds. run when they do this, both are not politically possible.


Class warfare is still popular in some regions of the country, which is why you have a false tax like this and advocated by people like Teddy K...its also very dangerous, they are playing with fire.

I think a national sales tax would have endless possibilities. Govt. revenues would sky rocket. It would be alot easier to juice the economy when you need it. The things I have read about a flat tax seem almost to good to be true. I know personally I freakin dread this time of year and my wife is an accountant. I dabble in property. I like to day trade. I hate this time of year with the records I have to keep.

GGniner Wrote:

OUGwave Wrote:

GGniner Wrote:since RFK is the new Sig, do you think the Kennedy Clan should pay the Estate Tax? or be exempt since they are the Kennedy's?

They should, of course. And they think they should.

So, forgive me, but I don't see your point.

The Kennedy's have moved over $500 Million of the family fortune into off shore accounts and sophisticated Trust and private "foundations" specifically to avoid the estate tax and "keep the money in the family", while Ted Kennedy is publicly a "supporter" of this very tax. They are "Do as I say, not as I do" liberals, is my point. The kennedy's have only paid a total of 34K in estate taxes by their own records, their biggest asset is a tax shelter in Fiji called : Merchandise Mart real estate company

Its more than just a principled argument as NinerFan1 points out, its also not wise to basically encourage the Rich to funnel their money into countries like the Caymans or Swiss, I think the new hotspot is the Netherlands who changed their laws to attract this.......I'm going to go out on a limb and state that the US would be better off if these people are allowed to keep their money in US bank accounts and investments.

The money these families keep in the US will simply go into "tax exempt" bonds to be transferred before death. The Walton's will not save 30 Billion dollars if the tax is repelled, because they will not pay it to begin with unless their accountants and lawyers are asleep at the wheel.

Ted Kennedy (who, by the way, while well off -- the poorest Walton or Cox or Gallo would jump off a bridge if they woke up tomorrow and had Ted Kennedy's money) not only supports keeping the estate tax, he has sought to make tax shelters illegal. He plays by the rules of the game currently, yes. But he has fought to change those rules so that he would have to pay even more. Your charge of hypocrisy holds no water.

Also, what you call "sophisticated trusts and foundations", most people call charities.

And a nice job of side-tracking the debate, but none of this refutes MY point, which is that the extreme rich are not getting double taxed, they are NOT paying their fair share. Why we would want to worsen this problem is beyond me.

Machiavelli Wrote:I think a national sales tax would have endless possibilities. Govt. revenues would sky rocket. It would be alot easier to juice the economy when you need it. The things I have read about a flat tax seem almost to good to be true. I know personally I freakin dread this time of year and my wife is an accountant. I dabble in property. I like to day trade. I hate this time of year with the records I have to keep.

A national sales tax would would increase the amount of taxes paid by the poor. So would a flat tax. Both of those, while sounding like great concepts, would increase the tax burden on the middle and lower classes.

I am also against the estate tax. That money was already taxed when it was earned, why should it be taxed again?

GrayBeard Wrote:I am also against the estate tax. That money was already taxed when it was earned, why should it be taxed again?

Not true. See my posts above.

Most of the wealthiest American estates -- basically all of those who are NOT exempt under the current estate tax -- earn most of their wealth off of capital gains which are only taxed when they are SOLD. So when they roll over at death, they still have NEVER been taxed.

See the link in my above post for a handy graph that shows that this untaxed portion is the majority of the wealthiest estates, and the proportion that is untaxed grows on average as the size of the estate grows.

OUGwave Wrote:

GrayBeard Wrote:I am also against the estate tax. That money was already taxed when it was earned, why should it be taxed again?

Not true. See my posts above.

Most of the wealthiest American estates -- basically all of those who are NOT exempt under the current estate tax -- earn most of their wealth off of capital gains which are only taxed when they are SOLD. So when they roll over at death, they still have NEVER been taxed.

See the link in my above post for a handy graph that shows that this untaxed portion is the majority of the wealthiest estates, and the proportion that is untaxed grows on average as the size of the estate grows.

But still, when they are sold they will be taxed. It is still double taxation.

GrayBeard Wrote:

OUGwave Wrote:

GrayBeard Wrote:I am also against the estate tax. That money was already taxed when it was earned, why should it be taxed again?

Not true. See my posts above.

Most of the wealthiest American estates -- basically all of those who are NOT exempt under the current estate tax -- earn most of their wealth off of capital gains which are only taxed when they are SOLD. So when they roll over at death, they still have NEVER been taxed.

See the link in my above post for a handy graph that shows that this untaxed portion is the majority of the wealthiest estates, and the proportion that is untaxed grows on average as the size of the estate grows.

But still, when they are sold they will be taxed. It is still double taxation.

I had a more elaborate argument prepared for this, but its not needed.

Look. Double taxation is the same person being taxed twice. This happens all the time. You're taxed on your income, and then you're taxed on what you buy with that income.

The difference here is, you get taxed ONCE, and your inheritor gets taxed ONCE.

Every single transfer of wealth in this country gets taxed. I get taxed when my company transfers wealth to me. I get taxed (and the store gets taxed) when I transfer money to the store to buy my goods. I get taxed when I sell my assets on the market.

It is the transfer being taxed. So, think of the estate tax as the tax on one person transferring wealth to another person.

Look, I've paid a significant amount of estate tax in my life. I've paid probably as much in state estate taxes as I have in federal income taxes, if not more. I'm only getting taxed once on the money, the deceased got taxed once. The money is INCOME to me... of course I should pay tax on it, just like I'd pay taxes on lottery winnings or my wages. We tax transfers of money in this society. Its entirely consistent.

OUGwave Wrote:Ted Kennedy (who, by the way, while well off -- the poorest Walton or Cox or Gallo would jump off a bridge if they woke up tomorrow and had Ted Kennedy's money) not only supports keeping the estate tax, he has sought to make tax shelters illegal. He plays by the rules of the game currently, yes. But he has fought to change those rules so that he would have to pay even more. Your charge of hypocrisy holds no water.
.

of course he says he's against tax shelters Publicly, I'm sure he's also in favor of Manslaughter and Drunk Driving laws publicly too. Watch politicians actions not their words.

also, my other point apparently flew over your head. Say we do outlaw tax shelters, make it illegal to put money in offshore accounts, etc. What do you think the "rich" will do then? I think they may move to the bahamas out of their own self-interest, or any other nice paradise that then changes their laws in their self-interest to attract these new wealthy and powerful citizens.

then the next step in this is to turn into a closed society and not allow the rich to leave, probably some form of communism/socialism/fascism in which people like Teddy K are our rulers so it still doesn't effect him. Its no wonder the left cozies up to Castro and that cuban immigrants vote overwhelmingly republican or Libertarian, they've seen this play out first hand.

OUGwave Wrote:I won't answer you point for point because its going to get too messy. I would simply submit that most of the super-estate money, the stuff that is on estates over $10 million, has never been taxed. Not even once. The link I gave above shows the evidence for that. Rather than eliminating the estate tax entirely, it makes perfect sense to close these loopholes.

Yes, I read it. The part you are referring to I believe is
[quote]Indeed, the majority of assets in estates valued over $10 million consist of untaxed capital gains

Ted Kennedy is also very fond of alternative energy sources like wind farms.....so long as they aren't off the coast of Kennebunkport.

OUGwave Wrote:Problem with doing away with the estate tax completely is that we simply can't afford it, and the extremely wealthy will still be extremely wealthy anyway, just a bit less so. The inheritors are not doing anything productive for the money anyway, so it isn't like taxing earned income.

Instead, in almost all cases they are taking advantage of government largesse -- they use the roads, they benefit from the military, they benefit from their company's (which they enjoy stock in) employees' education and the other investments we make in human resources. If the Bush administration takes away the capital gains tax, and the estate tax, these people will be paying basically nothing in federal taxes (as most inheritees of multi-million dollar fortunes don't work and therefore don't pay payroll taxes).

Considering that they benefit from the federal government, is that fair?

You've lost it man. THEY ALREADY PAID TAXES ON THE MONEY!! They paid taxes n the money they used to invest whether it be the house or the stock market or whatever. It was after tax money! Now the feds want to take half of it just because your parents die? And it only hurts the rich? All those middle class rich farmers who have to sell their land and get out of farming just to pay the inheritance taxes? And as optomisticowl pointed pointed out, the after tax money used to invest in 1955 was worth far more than it is today. Where is OptomisticOwl BTW? The guy who lives in Weatherford?

This is nothing less than class envy on the part of loser democrats. If somebody has worked hard all their life to accumulate 1 or 2 million dollars in assests, why do they have to give half of it away to the feds when they die?

Quote:They pay 14 million a year in property tax to the city of Asheville

whatever school district this is in, either has some really nice schools or some adminstrators pocketing some $$$ somewhere in the chain.

Quote:Ted Kennedy is also very fond of alternative energy sources like wind farms.....so long as they aren't off the coast of Kennebunkport.

he's also against new oil drilling basically anwhere, when his family owns an oil company that is already drilling and thus benefits from this action, thus effecting the supply side of the supply/demand equation. RFK Jr. has gone as far as to state that profiting from oil is immoral, when his own trust he lives off does just that.

Ninerfan1 Wrote:How is it that people who own property have never been taxed on it? I own property and I pay property taxes every year.

We've been talking about federal taxes here. If you're paying federal taxes on property, you should look into a new accountant. My point has been that the federal government does certain things uniquely that the richest .1% of Americans take advantage of, but do not pay their fair share of.

Quote: The person who's died may not have paid tax on that money at the time of their death, but the moment their inheritees take it out they will be taxed. How fair is it for them to be taxed by the estate tax, which comes directly out of income, and then be taxed again when they cash it out. More likely is they will have to cash out those stocks to pay the estate tax, and they'll be taxed with cap gains tax on top of it. Double taxation.

I want to be ABSOLUTELY CLEAR ON SOMETHING, that I think you have completely mistaken. And I think Endzone and Gniner are missing it too, obviously.

You ONLY pay capital gains tax on the capital gains that have been earned from the time you inherited the securities.

Look. Lets say that I die with a large portion of unrealized capital gains. I've never paid any kind of tax on these assets at the time of my death. Now in my will, I give them to you. The estate tax taxes you for the cap gains that I never "realized" -- i.e. (total value of my securities - what I paid for them). If and when YOU ever sell the cap gains, you are required to only pay cap gains income tax on those gains that occurred after you inherited the estate. If you liquidate immediately, you owe no income tax.

My cap gains slate is wiped clean at the time of my death. The only time that asset is taxed is with the estate tax. They have never and will never be income taxed by you or I. You are only responsible for the cap gains from the point you inherit it onwards.

It is not double taxation. Eliminating the estate tax means that the unrealized capital gains that accrued during my lifetime will never be taxed at all.

Quote:That they should be subject to a higher tax than the income tax they will ultimately pay upon sale of any investments.

Not true. See above. The heir is not responsible for paying income tax on the capital gains that accrued prior to inheritance. The only way those get taxed is through estate tax.

Quote:That money will be taxed the moment it is cashed out.
They sell the property, that they've been paying property tax on while owning it, they will be taxed. They cash out the stock, they will be taxed. Add to that the estate tax and it's double taxation, and it's wrong.

Again, flat incorrect. First, property tax is state tax. I'm talking about federal tax here. And capital gains which you do NOT pay during the life of the asset, only at the time of sale. Also, see above. The heir is only responsible for what accrues from their inheritance onwards. The estate tax covers what accrued during the deceased lifetime. Those gains are themselves two different assets.

Quote:

Quote:The Walton family alone would save 32 billion.

Roughly 1.5% of the federal budget. What an impact.

I think you meant .15%, but still, thats 10 times what Bush is cutting from the VA over that period. Thats a fifth of our costs in Iraq for this supplemental -- and thats just one family. Thats a huge impact, but moreover, it speaks to what our priorities are. Without the estate tax, that money escapes taxation COMPLETELY.

Quote:And as I pointed out, there is zero evidence the government wouldn't have already spent that money long before it ever gets to them. So any argument that collecting the whole of the estate tax would somehow put us in the black disregards decades upon decades of government waste.

Look, thats not pertinent here. The fact that the government wastes tax money doesn't mean it should just stop collecting revenues altogether. It means it should waste less. Has no bearing on this debate.

Quote:It doesn't matter if you're talking about them or not. Ignoring them doesn't eliminate how unfairly they are treated under the estate tax.

Not true. They are not treated unfairly. Stop repeating this. Each asset, each transfer of wealth, is only taxed once. Hate to keep repeating it, but see above. I just inherited an estate, trust me, I know. I paid the NJ state estate tax for the accrual of gains on my Aunt's estate during her lifetime. I do not have to pay any other income tax because I liquidated them immediately. If I waited ten years, I would only be responsible for paying tax on the gains during that ten year period. If you eliminate the estate tax, this means that the gains during the deceased lifetime will never have been taxed.

Quote:The fact that they haven't paid taxes on it when they die ignores the fact that the moment their inheritees cash it out it will be

Not true. See above.

Quote:Take the Biltmore Estate up in Asheville for example. They pay 14 million a year in property tax to the city of Asheville (which clearly runs contrary to your websites assertion that the rich don't pay tax on property). It is still a private residence and once the man of the family that owns it dies it will be subject to the estate tax. This is a house that was built for 10 million in the early 1900's. In today's money that's 2 billion dollars. It's appreciated staggeringly since then based on the art work, tapestries and everything in there that make it priceless. But that doesn't matter, they will still be forced to pay this tax. They can't sell the house, so the tax will come out of their income, which I promise you isn't enough to cover what it will cost them. They employ over 2000 people at the estate.

You are confusing federal and state taxes again. The federal government only taxes the estate. If the house is never sold, they do not have to ever pay for the accrual of the value in capital gains. Yes, the estate tax will come out of their income -- but trust me, they can afford it. If not they would just cash out -- they're obviously making way more money off the WHOLE estate than they are paying in estate tax once ever few decades.

Quote:For all the blustering people do about what the rich have benefited from it's easily ignored what they've given back. How many people does the Walton family employ OU? How much money does the government collect on the products they sell? The property tax they pay on their stores, the income taxes that come from the checks of the millions of people they employ?

You're losing it man. Wal-mart's a public company. Whoever it employs does not exempt the owners of Wal-mart stock, from gains they make on their stock. That would be like you or I not paying income tax. Their source of income, is the gains on the wal-mart stock they inherited. If you eliminate the estate tax, nobody in the family will ever have to pay a dime dime on their gains from that stock during their lifetimes... and an heir can cash out immediately upon receiving the estate (having no cap gains during their ownership period), and reap a windfall of income that will never be taxed.

As far as I can tell, this is a case of you, and others in this thread, not understanding that the capital gains liability slate is wiped clean at the point of death. Without an estate tax, heirs will never have to pay for the income they inherit from the assets bequeathed to them -- assets that have not been taxed previously.

O.U's argument makes complete sense. You buy a property for 10,000 dollars. Over your lifetime that property value increases to 100,000. When you die your offspring would not have to pay a bit of tax on that 90,000 without an inheritance tax. Why is that so hard to understand?????

Machiavelli Wrote:O.U's argument makes complete sense. You buy a property for 10,000 dollars. Over your lifetime that property value increases to 100,000. When you die your offspring would not have to pay a bit of tax on that 90,000 without an inheritance tax. Why is that so hard to understand?????

NRST would end this silly debate cold.

Die to Enrich Government?

William F. Buckley is a very smart man.

When Joseph Kennedy died, the Kennedy family paid only $134,330.90 in taxes on a fortune valued at around $500 Million in today's dollars and an effective rate of around .04% or less, thanks to the money

Ninerfan1 Wrote:Die to Enrich Government?

William F. Buckley is a very smart man.

So is Michael Kinsley:

http://www.slate.com/default.aspx?id=103874

Both agree the Iraq war was a blunder, so they've got that going for them. :)