The Conservative Cave
Current Events => The DUmpster => Topic started by: Texacon on December 15, 2010, 01:54:28 PM
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A DUmmie is getting close ... (http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x14895)
garybeck (1000+ posts)
Wed Dec-15-10 01:27 PM
Original message
Question about estate tax
Maybe this is a dumb question, but I need to ask it...
Supposedly the money in your estate has already been taxed. If it was income, you paid income tax in the year you made the money. If it was capital gains from investments, you paid it back then also. Retirement accounts... my understanding is you pay tax on that too, at some point, either when you put it in or when you take it out. Perhaps there are other ways people make money but those I think these are the main three, and I would think that the money in most estates has come mostly from these sources and has already been taxed.
so my obvious question is, isn't an estate tax essentially a tax on money that has already been taxed? Isn't that double taxation?
Now, I'm a lefty liberal progressive that wants higher taxes on the rich. So don't get me wrong. But the idea of taxing money that has already been taxed kind of bothers me. I'd rather see a higher income tax rate for the rich and if they save their money once it has already been taxed once, it should be theirs to keep.
Am I missing something? Am I wrong?
Hmmmm is someone using their thinking cap?
GodlessBiker (1000+ posts)
Wed Dec-15-10 01:31 PM
Response to Original message
1. Many things are double taxed. Corporate profits are taxed at the corporate ...
Edited on Wed Dec-15-10 01:35 PM by GodlessBiker
level and then taxed again as income to you when you receive those profits as a dividend.
A couple of the primary purposes of the estate tax are to resist the inclination to form robber baron family dynasties through inherited wealth and to encourage donations to charity, since those funds are not taxed.
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garybeck (1000+ posts) Wed Dec-15-10 01:35 PM
Response to Reply #1
4. OK my tongue is half in my cheek but...
isn't that the american dream... to "form robber baron family dynasties through inherited wealth?"
I mean, I feel like one of the "values" my parents passed on to me is that I'm supposed to work hard, and save up money so that I can pass it on to my kids and they can live an equal or better life than me.
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GodlessBiker (1000+ posts) Wed Dec-15-10 01:39 PM
Response to Reply #4
8. I don't think that's the "American Dream." The "American Dream" is to ...
get married, have kids, be able to afford a nice place to live as you watch your kids grow up, retire after your kids are grown on a reasonably comfortable income so as not to be a burden on your kids; things like that. The whole white picket fence thing.
I don't think most people would think that their dreams were shattered or unfulfilled if they didn't turn out to be John D. Rockefeller or Cornelius Vanderbilt.
So Godlessbiker is the spokesman for ALL America.
Big Blue Marble (1000+ posts)
Wed Dec-15-10 01:46 PM
Response to Reply #6
13. Absolutely.
Of course the rich would not like that either. But capital gains taxes are calculated a much lower rates than
inheritance taxes, so they might like better. Also they would be able to exercise better timing of the tax event.
One thing I do not like about estate and inheritance tax is it sometimes forces the estate to liquidate assets
to meet the tax obligations without regard to the market environment.
Still more thinking going on ...
dflprincess (1000+ posts)
Wed Dec-15-10 01:41 PM
Response to Original message
10. "once it has already been taxed once, it should be theirs to keep"
except they're dead when the estate tax kicks in and, as the saying goes, they can't take it with them. The people who pay the estate tax are the heirs who have not paid taxes on the money in the past. Do you really have a problem with Paris Hilton having to pay taxes on money she inherits? It could be the only chance she gets to actually contribute to the country.Think of it as being the dues they pay for being members of the lucky sperm club.
Ahhhh the real reason starts to shine through!
Warren DeMontague (1000+ posts)
Wed Dec-15-10 01:42 PM
Response to Original message
11. In answer to your question, yes, It is double taxation. Doesn't mean it's inherently wrong
Edited on Wed Dec-15-10 01:43 PM by Warren DeMontague
but it certainly is money that is being taxed twice.
I think a few pertinent points regarding the estate tax are worth mentioning; first off, the fit being thrown with regards to it and "the deal" is far outsized compared to the revenue in question- we're giving up far more revenue by cutting yearly income taxes for the people making, say, 7 figures a year. People should look in the mirror and ask themselves if this is really about policy and revenue, or just about the fact that they don't like Paris Hilton.
Secondly, with the old one million exemption, a lot of people with real estate in places like California and New York will find themselves subject to it just on the basis of property values. We're not talking about folks living in Mansions, either. It's pretty damn easy to hit that mark with property in certain markets. I don't think the purpose of the Estate tax is to force folks to sell the family home just to pay the taxes on it.
All that is a reasonable argument for raising the exemption, which is likely to happen. The question is how much and what percentage to tax above that.
the redcoat (491 posts)
Wed Dec-15-10 01:44 PM
Response to Original message
12. The difference is the people receiving it
In the "first" tax, it's the rich individual getting taxed. When that individual dies, their heirs essentially get free money, so the tax is on that free money of the heirs, not the rich person. If that rich person were alive and bought an item, there would still be sales tax because of the transfer of money. Because money is being transferred from one person to another, consider it like a transaction.
So, this is a shitty answer, but "yes and no."
I found the above post to be one of the DUmber posts.
Pretty small thread a the moment but it is sure to grow. Anytime they throw up someone having more than they do and more than they will ever attain ... well the DUmmies seem to pile on.
KC
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There's going to be a run on pizzas.
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There's going to be a run on pizzas.
Heh. When they get tombstoned do all the other DUmmies get to split up their stuff or does Skinner keep it?!
:-)
KC
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Heh. When they get tombstoned do all the other DUmmies get to split up their stuff or does Skinner keep it?!
:-)
KC
What stuff? A broken down, 20 year old desk and chair from their "college days", a 10-year old MacIntrash with the DUmp permanently bookmarked on the web browser, an ashtray full of joint stubs, a bowl of 3-week dead bong water, about a dozen empty Cheetos[supTM[/sup] bags and a Twinkie box full of O'Bumper stickers. Retail value of all of the above wouldn't buy Bobo the Hobo a 750ml bottle of MD 20/20 at the liquor store next to the Denver Public Lie-bary.
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Amazing, a DUmmie who "gets it"!
As far as the heirs getting free money, they don't just sit on it ya asshat! They invest and spend just like everybody else and pay taxes on income, purchases, property, etc.
Besides, you're goin' to find the uber rich will just move their assets out of country in order to keep from losing what they worked hard to earn! Not only will DC lose revenue, but the economy will suffer as well since they aren't likely to spend it here! What a good ****in' idea!
Then who ya gonna tax? Oh, that's right! The rest of us, since according to you pricks, the gubmint is losing money, money they think they deserve! It's amazing y'all can't figure out the gubmint monopoly never earns a damn dime!
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Isn't that the truth. The significantly wealthy know what they're doing. They have people who know ways to protect their estate from the DUmp's grubby sticky hot little paws.
The DUmpmonkiez can salivate all they want over Paris Hilton's fortunes. They're not going to get it or anything like her.
Godlessbiker pissed me off up there, with his dictum on what the American Dream ought to be for me and thee. **** off, I'll dream as I please.
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Isn't that the truth. The significantly wealthy know what they're doing. They have people who know ways to protect their estate from the DUmp's grubby sticky hot little paws. The DUmpmonkiez can salivate all they want over Paris Hilton's fortunes. They're not going to get it or anything like her.
Godlessbiker pissed me off up there, with his dictum on what the American Dream ought to be for me and thee. **** off, I'll dream as I please.
Isn't that the truth. I read a story not long ago about some uber rich dude who bought a yacht in one state then tried to ditch state taxes by parking it in another state ....
Can't quite recall who that evil conservative rich bastard was though ......
I'm sure some DUmmie will be able to recall who it was. Maybe they'll come enlighten us.
:lmao:
KC
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Isn't that the truth. I read a story not long ago about some uber rich dude who bought a yacht in one state then tried to ditch state taxes by parking it in another state ....
Can't quite recall who that evil conservative rich bastard was though ......
I'm sure some DUmmie will be able to recall who it was. Maybe they'll come enlighten us.
:lmao:
KC
Ya know, I think you're right! I seem to remember he served in Vietnam, for some reason.
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Ya know, I think you're right! I seem to remember he served in Vietnam, for some reason.
Yes and parts of his three hour tour were SEARED, SEARED into his mind I tell you.
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Yes and parts of his three hour tour were SEARED, SEARED into his mind I tell you.
Yeah! Didn't he tell America that he was "reporting for duty" a few years ago?
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Yes and parts of his three hour tour were SEARED, SEARED into his mind I tell you.
They were also seared on the band-aids covering his Purple Hearts.
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Ya know, I think you're right! I seem to remember he served in Vietnam, for some reason.
I believe he's married to some rich woman who inherited a large sum of money and a worldwide condiment manufacturing company from the death of her first husband.
I also remember he has the same initials as a former president of the US that was assassinated back in the early '60.
I wish I could remember his name... :confused:
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I believe he's married to some rich woman who inherited a large sum of money and a worldwide condiment manufacturing company from the death of her first husband.
I also remember he has the same initials as a former president of the US that was assassinated back in the early '60.
I wish I could remember his name... :confused:
NumbNutz? Naw, that wasn't it! Although it does cover all the DimWit presidents since Johnson!
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Yes and parts of his three hour tour were SEARED, SEARED into his mind I tell you.
Also, I seem to remember, but I could be wrong on this, that this rich bastard recently petitioned to have his property taxes adjusted because of the decline in value of one of his homes... hummmm.. who could it be...
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Here's a nice little exchange that puts the liberal mindset on display for all to see;
lumberjack_jeff (1000+ posts)
Wed Dec-15-10 04:10 PM
Response to Reply #29
41. Because no one accumulates $3 or $4 million from paychecks. n/t
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badtoworse (116 posts)
Wed Dec-15-10 04:36 PM
Response to Reply #41
42. Some people accumulate much more than that from paychecks,
but that goes to a different fairness issue - the disparity between executive pay and what the least paid people in an organization get. The split needs to be changed to spread the money around more evenly
Over the years, both the capital gains tax rate and the tax rates on ordinary income have varied greatly. Currently, the capital gains tax rate is lower than the higher marginal rates, but that has not always been true. If it's fair to tax the money twice, then the rate it was taxed the first time shouldn't matter. If it does, then explain it to me.
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lumberjack_jeff (1000+ posts)
Wed Dec-15-10 04:48 PM
Response to Reply #42
43. Because government must provide services, and the wealthy have all the money.
**** "fairness".
They have the money, we have the torches and pitchforks.
Heirs don't have a superior moral right to tax-free inheritance than wage earners have to tax-free salaries.
**** 'em. That's why.
The rich must pay because "By God the poor deserve it more!" "If they don't pay we'll come and take it!!"
'Cept ... lumberjack .... the rich don't have torches and pitchforks. They have firearms. Never bring a knife to a gun fight. You won't make it.
KC
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Also, I seem to remember, but I could be wrong on this, that this rich bastard recently petitioned to have his property taxes adjusted because of the decline in value of one of his homes... hummmm.. who could it be...
Seems this dude lived/lives up somewhere in your neck 'o the woods miskie. Is that right??
KC
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They were also seared on the band-aids covering his Purple Hearts.
I remember those:
(http://www.kilmerhouse.com/wp-content/uploads/2010/12/Colorful-BABABs.jpg)
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What stuff? A broken down, 20 year old desk and chair from their "college days", a 10-year old MacIntrash with the DUmp permanently bookmarked on the web browser, an ashtray full of joint stubs, a bowl of 3-week dead bong water, about a dozen empty Cheetos[supTM[/sup] bags and a Twinkie box full of O'Bumper stickers. Retail value of all of the above wouldn't buy Bobo the Hobo a 750ml bottle of MD 20/20 at the liquor store next to the Denver Public Lie-bary.
HA! :lmao:
H5!
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Structurally it is indeed a double tax, the decedent paid the income taxes when it was earned and ALSO pays the estate taxed PRIOR to any distribution to anyone, it is NOT the heir who pay the tax, in fact under Section 101 (IIRC) or the IR Code, as an inheritance it is not taxable income to them.
The example of the corporate earnings/dividend being taxed twice is incorrect, since the same entity is not paying both taxes. The corporation pays taxes on its income (Though I do not remember off-hand whether dividend distributions are subtracted from gross before taxable income is derived, I'll assume for the sake of argument they are). The shareholder, a different entity from the corporate taxpayer, then pays income tax on the dividend.
Though I will say that the DUmmies seem to know every bit as much about law and accounting as they do about economics, national defense, and life management.
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so my obvious question is, isn't an estate tax essentially a tax on money that has already been taxed? Isn't that double taxation?
Very good!
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so my obvious question is, isn't an estate tax essentially a tax on money that has already been taxed? Isn't that double taxation?
Property taxes would also be a form of double taxation, multiple taxations on the same personal property, actually.
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lumberjack_jeff Donating Member (1000+ posts)
Wed Dec-15-10 04:10 PM
Response to Reply #29
41. Because no one accumulates $3 or $4 million from paychecks. n/t
Sure they could, there are people who live frugally and make good investments. Also a friend of my Aunt's inherited stock from her Mother, her Mother was a housekeeper for a wealthy family, she was given that stock in the 30's, she passed it onto her Daughter (she wasn't wealthy) and the Daughter passed it on to her 2 children when she passed away, that stock was worth millions when the children inherited it.
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lumberjack_jeff Donating Member (1000+ posts)
Wed Dec-15-10 04:48 PM
Response to Reply #42
43. Because government must provide services, and the wealthy have all the money.
**** "fairness".
They have the money, we have the torches and pitchforks.
Heirs don't have a superior moral right to tax-free inheritance than wage earners have to tax-free salaries.
**** 'em. That's why.
People of the DU, does this person make you proud?
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Heh. When they get tombstoned do all the other DUmmies get to split up their stuff or does Skinner keep it?!
:-)
KC
Good question, shouldn't newbies inherit the post count of those pizza'd? that's fair IMO, let the least motivated posters gain the post count of the most motivated posters. Post-Count Redistribution NOW!
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Property taxes would also be a form of double taxation, multiple taxations on the same personal property, actually.
Not sure I follow you on this one, Thund. Are you sayin' the income you bought the property with was taxed, so when you pay property tax it's bein' taxed twice?
Your Income Tax pays for federal infrastructure. Property Tax, especially if you live in a state without an income tax, pays for local infrastructure. Two distinctly different taxes.
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Also, I seem to remember, but I could be wrong on this, that this rich bastard recently petitioned to have his property taxes adjusted because of the decline in value of one of his homes... hummmm.. who could it be...
Don't forget he registered his Yacht in another State to avoid taxes in his own State.
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People of the DU, does this person make you proud?
Of course he does! His real name has "Hussein" in it! if it ain't him, it;s sure as hell damn close!
ETA: forgot an "S"! I know, hard to believe when we're talkin' about the DUmp, huh?
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Not sure I follow you on this one, Thund. Are you sayin' the income you bought the property with was taxed, so when you pay property tax it's bein' taxed twice?
Your Income Tax pays for federal infrastructure. Property Tax, especially if you live in a state without an income tax, pays for local infrastructure. Two distinctly different taxes.
Property taxes aren't a one time deal. They get paid every year and in most cases go up every year. I know those taxes go to local governemnt services, but then there are also local sales taxes, and fees tacked onto every service provided to individuals.
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Property taxes aren't a one time deal. They get paid every year and in most cases go up every year. I know those taxes go to local governemnt services, but then there are also local sales taxes, and fees tacked onto every service provided to individuals.
Well, it ain't like the roads you drive on to get to your property last forever, either! Especially in places like I live where ya have a full four seasons! freeze and thaw wreaks hell on 'em!
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Well, it ain't like the roads you drive on to get to your property last forever, either! Especially in places like I live where ya have a full four seasons! freeze and thaw wreaks hell on 'em!
I just wonder if taxes were the tipping point for many that file for bankruptcy or that were foreclosed on. I know that the last year of our mortgage that the taxes were a large portion of it. I almost miss being able to pay it monthly instead of being hit by the tax bill.
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I just wonder if taxes were the tipping point for many that file for bankruptcy or that were foreclosed on. I know that the last year of our mortgage that the taxes were a large portion of it. I almost miss being able to pay it monthly instead of being hit by the tax bill.
Not sure about where you're at, but we can't include our taxes in Bankruptcy. The gubmint gonna get thier's no matter what!