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Old 12-06-2006   #11
Join Date: Jun 2006
Posts: 76
Stof, until we have a viable Libertarian third party it's called voting for the lesser of two evils. And as to the death tax it isn't how much money someone inherits but the idea behind it. This money was already taxed once and belongs to the individual who earned it to do what they please.

Yes, there does have to be some type of income re-distrubution in a captialistic society so the majority of money doesn't end up in the hands of a few.

"any man who would trade freedom for security, deserves neither freedom nor security" Thomas Jefferson
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Old 12-06-2006   #12
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Congrat's Teamamericawp for being born into the less than 2% of the wealthy that are affected by the estate tax. I too like the idea of perpetual royalty. Perhaps Paris Hilton could be the next Repub presidential candidate. Bush Jr pulled it off with a slightly worse resume.


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Old 12-06-2006   #13
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death tax

in regards to the inheritence tax, the current limit is $2 million. I'm not sure about cstorks 30 and 40 million numbers, and there may be some activity on tax rates for those amounts, but i can say that the current inheritence tax is a 50% tax on inheriting any amount of 2$ million or over.

personally, i like the robin hood thought and direction, but the 2$million threshold and the 50% rate are more stringent than many who support that tax might think, even though the repeal would have damaging effects on the government.
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Old 12-06-2006   #14
Join Date: Aug 2006
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The threshold is $15-$20 million, not $2 million. And the 50% tax rate on levels above $15-$20 million is long gone. It's much lower now.
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Old 12-06-2006   #15
Join Date: Apr 2004
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well, stof, we seem to have a difference of opinion.

perhaps a CPA or financial lawyer can clear this up....

but i'm very confident that the 2 million threshold and 50% rate is correct.

maybe your numbers are for future taxes, while mine are for the current rates.
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Old 12-06-2006   #16
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FYI on Inheritance: If your total worth exceeds 2 million, you are eligible for a 45% tax when you pass it down, but it doesn't matter because you would have to be a complete idiot for this to happen. WHY? Loopholes. Trust funds are set up in order to avoid this high tax which is only good until 2010, then the government will set a new limit which will probably be 1 million, but who knows. AB trusts allow you to set up trusts within trusts which allows one to pass along wealth avoiding the high taxes. Anybody worth over 2 million should have a tax attorney who will set them up. Anybody worth 2 million or more and only sets up a will as their legal testament to deligate funds will be taxed huge. Like I mentioned, the law will change very soon and a new limit will be set (it is set up like a contract where the term determined will expire allowing them to set new limits of total worth)
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Old 12-06-2006   #17
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There is currently an exemption on the single generation death tax of up to $2 million, but there are a large number of additional exemptions that make certain things not count in the $2 million total. The current death tax rate is 46% for a single generation bequest and 80% for generation skipping. See sources listed below. A slightly more detailed description of the pros and cons of the death tax, for those interested:

The Federal Inheritance Tax, commonly referred to as the Death Tax, is an issue of American economics that raises much controversy and debate. The Inheritance Tax puts a levee on assets acquired by people through inheritance, with certain exceptions. This federal tax applies to inherited property such as land, businesses, and houses in addition to liquid assets and material possessions. On top of the moral and political debate spurred by this instance of government interference in personal fiscal affairs, there is also the economic controversy of how such a tax will affect the nation’s economy as a whole. Economic ramifications include possible changes in personal spending, business planning, and the results of these changes in the nation’s gross domestic product. While there are numerous reasons that support and refute the repeal of the Death Tax, basic reasoning says that one option should be superior to the other.

The Federal Inheritance Tax was first passed in 1916 (though it has been altered several times since then). The tax was passed to combat the large (and growing) gap between classes in the late 1800’s and early 1900’s. This was the age of the capitalist entrepreneurs and robber-barons such as Vanderbilt and Carnegie. While some of these capitalists were legitimate businessmen, many were simply taking advantage of the American populace and running away with the profits. The Federal Inheritance Tax was passed to help prevent this from causing a massive and irreconcilable separation between the lower, middle, and upper classes of the United States. In short, this tariff was instituted to bring an end to the gilded age of the turn of the twentieth century [1]. In 2001, the Economic Growth and Tax Relief Reconciliation Act began the process of phasing out the Federal Inheritance Tax. Under this program, the tax would be reduced from its 2001 rate of fifty-five percent to zero percent over a course of ten years (the tax is forty-six percent for 2006). This however is not the elimination of the Death Tax. The next year after the tax reaches a rate of zero percent, it would be returned to its initial rate. So, in 2011, the tax would once again be fifty-five percent. At this point, the tax could either remain at fifty-five percent or continue in the previous reduction cycle, depending on the decisions of Congress. Members of the House of Representatives and the Senate are currently working to reach an agreement regarding the tax, which may also involve some new formulation of the tax. There is also a generation skipping death tax that applies to grandparents willing property and assets to their grandchildren ( this tax is significantly higher than the standard Federal Inheritance Tax for parents passing property on to their immediate children. The Generation Skipping Tax has an effective rate of 80%, nearly double the standard tax.)[2].

Proponents of the elimination of the Federal Inheritance Tax cite a number of moral, political, and economic reasons for repealing the tax. They argue that citizens should have the right to spend their money as they see fit. Money given to a person or passed on to a person through a will should be spent by the person, not the government. These people believe that the role of the government is to interfere minimally and only to act when absolutely necessary [3]. Writers for the Seattle Times Company, a proponent of repealing the Inheritance Tax, suggest that the tax causes small businessmen to limit the growth of their companies to save money should they be assessed an inheritance tax they cannot afford from a relative [4]. This lack of investment directly affects the gross domestic product by decreasing funds that would otherwise be spent stimulating the economy. The Seattle Times Company also suggests that the Death Tax directly contributes to the fact that seventy percent of family businesses do not make it to a second generation and eighty-seven percent do not reach the third generation [2]. According to a study by the Heritage Foundation, as much as an additional eleven million dollars and 145,000 jobs could be produced in the country’s economy if the Inheritance Tax were to be eliminated [4]. In addition to the fact that all of these assets have already been taxed in the form of income, sales, and use taxes, the revenue the government produces from Inheritance Taxes is nearly insignificant. Less than two percent of the federal government’s revenue comes from the Federal Inheritance Tax and nearly sixty-five percent of that is spent in the collecting of the taxes [2]. These organizations argue that the Federal Inheritance Tax is insignificant to the federal government’s budget yet significantly impairs the individual families. This in turn negatively affects public spending and causes there to be less money in the economy, which decreases the United States’ gross domestic product.

There are also many arguments against repealing the Federal Inheritance Tax. Supporters of the Federal Inheritance Tax believe that the elimination of the tax would do more harm than good. Proponents of the Inheritance Tax often refer to the economic state of the gilded age in the late 1800’s and early 1900’s where the extremely large income gap between the upper and middle classes polarized citizens against each other. This resulted in civil and political unrest. Many economists and political scientists fear that the increased class separation will lead to poor voting habits in the American public. The concern lies in the fact that the income and class gap would cause people to vote on candidates and issues solely based on the monetary benefit that they would stand to gain. This harkens back to the era of the Boss Tweed Gang buying immigrant votes for the cost of bowl of soup. The practice of financially bribing citizens for votes lead to an extremely corrupt political representation in the city and state of New York [5]. Proponents of the Federal Inheritance Tax cite the prevention of further corruption in the government as one of their key planks. The Inheritance Tax also helps redistribute the wealth of the country and prevents the rich from becoming richer at the cost of the middle class. Between 1983 and 2004, the number of families with over ten million dollars in assets increased by 519% in the United States [5]. Eliminating the Death Tax would only magnify the concentration of the wealth in the upper classes. The concentration of wealth inhibits the democratic process in the United States by giving the upper classes a disproportionate amount of influence over politicians. Economists also argue that the death tax does not apply to all people because there is an exemption of up two million dollars per person. This exemption keeps the Inheritance tax from affecting the majority of people. According to Urban-Brookings Tax Policy Center, only one half of one percent of annual deaths will be subject to the Federal Inheritance Tax [6]. Because this tax only significantly affects the extremely wealthy, the repeal of the tax is labeled as an attempt by politicians to give breaks to their top wealthy contributors. In addition, this money would not have a major impact on the total net worth of the super-rich and therefore would not affect their spending (and would not provide any stimulus to the economy). Also, though the revenues gained by the tax are small compared to the total national revenues, they are significant compared to the national debt [5]. While the opponents of the Federal Inheritance Tax tell stories of people losing their farms and businesses because of their inability to pay the Inheritance Tax, they have been unable to provide a specific example of this happening [5]. This is largely due to the fact (which the opponents of the Inheritance Tax fail to mention) that estates where a farm or family business makes up a large percentage of the family property receive large amounts of additional exemptions from the Federal Inheritance Tax [5]. Over ten years, the repeal of the Inheritance Tax would take over 850 billion dollars out of the federal budget. These spending cuts would result in either a large increase in the national debt or a dramatic decrease in spending on special government programs (such as funding for education, veteran’s programming, and federal healthcare programs). Also, the Federal Inheritance Tax provides a great incentive for donations and bequests to charitable organizations. Without the Inheritance Tax, the Treasury Department estimates that charitable donations could drop as much as six billion dollars [7]. The negatives of the situation are fairly clear when it comes to the repeal of the Death Tax. So should the Federal Inheritance Tax be repealed or maintained?

The main arguments for the repeal of the Federal Inheritance Tax include the people’s freedom of choice, the government’s role in the management of the country’s economy, and the economic losses that result from the tax. While the argument that people have the right to choose how their money is spent is a valid one, the tax is not a major impingement on personal rights. The tax affects very few people and those who it affects know about the tax and its consequences well before the tax is leveed on them. In fact, the tax causes these people to plan and spend their assets even more wisely before the tax is assessed. The Inheritance Tax is one of the only progressive taxes in the United States. In the past, progressive taxes have proved to be very beneficial to the economy and this is a case of very minor government interference in the nation’s fiscal policy. The fact that the repeal of the tax would put even more power in the hands of the rich clearly indicates that this interference by the government is well justified. Lobbyists for the repeal of the tax use the economic consequences as their main argument against the so-called Death Tax. They attempt to scare the public with stories of honest home-town businessmen and farmers losing their businesses as a result of the heavy-handed tax. When asked to produce a single example of this happening, they failed to do so. This is simply a strategy of scare-tactics. They try to argue that the amount of money removed from the public economy by the tax is a large hit to public spending while also being an insignificant portion of the governments total spending. While it is true the revenue from the tax does not comprise the majority of the nation’s spending, it is a very significant amount when compared to the national debt. Nor is the tax a true burden on the people because it only taxes the very wealthy people of America. As a result, the tax does not take away a significant portion of the taxees income. It is for this reason that the tax will not noticeably affect these people’s spending. Consequently, there would be little change in the country’s gross domestic product, either. The Federal inheritance tax will keep the democracy of the United States an honest one while also producing the money and charity necessary for many of the country’s beneficial programs.

Works Cited

[1] Gates and Collins, Bill and Chuck. The Nation. “Long Live the Estate Tax.” 23 January 2003. Accessed 14 November 2006.
[2] Seattle Times Company. The Death Tax. “FAQ’s.” 2006. Accessed 14 November 2006.
[3] Freedomworks. The Death Tax. 2006. Accessed 14 November 2006.
[4] Seattle Times Company. The Death Tax. “Home.” 2006. Accessed 14 November 2006.
[5] Francis, David R. The Christian Science Monitor. “Democracy and the ‘Death Tax.’” 12 June 2006. Accessed 14 November 2006.
[6] Rogers, Diane Lim. The Brookings Institute. The San Francisco Chronicle. “ ‘Death Tax’ Repeal Unfair to Those Who Owe ‘Birth Tax,’” 31 May 2006. Accessed 14 November 2006.
[7] Hunter and Collins, Rosie and Chuck. Dollars and Sense. “ ‘Death Tax’ Deception.” February 2006. Accessed 14 November 2006.
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Old 12-06-2006   #18
pnw, Washington
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Howlie is dead on. Rich folks have people to handle this stuff and you can bet they all have trust funds set up.
teamamericawp, you cant defend bush's record by saying that he was better than Kerry cause you will never know. Bush however was elected twice so he had to better than Gore as well. Still no idea how he was elected twice. You can defend all you want but his record will stand for itself.

BTW, Carter helped build more houses than any other president. Just thought someone should throw him a bone.
"Yesterday I was clever and tried to change the world. Today I am wise and try to change myself." -Rumi
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Old 12-11-2006   #19
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there was a bush v kerry rematch. in case you missed it it was last novembers election where the republicans got clobbered by historic proportions.
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Old 12-11-2006   #20
Join Date: Jun 2006
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Before spouting off matobs check the facts. The Republicans did better in holding seats this off year election than 5 out of 6 prior comparable elections. Comparable in that during off year elections the party who has had the presidency for 6 years always loses seats.

Clinton, Reagan, Nixon, Truman and I believe Johnson did worse...just so you know the facts. Libs are lucky John Kerry wasn't running for anything in November, although he was running his mouth along with other has beens like Al "the tree-I created the internet" Gore.

"any man who would trade freedom for security, deserves neither freedom nor security" Thomas Jefferson
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