Estate Tax comparisons
by Linda Beale
Friday Animations–Estate Tax
crossposted with Ataxingmatter
[now updated to provide the animation feature–thanks to Steve Cook, at the Cook law firm, available here and Ataxingmatter]
Well, not exactly an animation, but Estate tax attorney Douglas A. Cook has a chart on the Federal Estate Tax 2001-2011 (linked from the Wills, Trusts & Estates Prof Blog) and also as an animation (see below). Certainly a picture worth a thousand words in terms of showing that ordinary Americans are essentially not taxable under any version of the estate tax. So what the Obama -GOP deal amounts to is a giveway to those few millionaires who had enough assets in the wrong category that they would actually have to pay some amount of tax–only about 5,500 estates under the 2009 version of the bill, about 145,000 in 2011 if the current laws (enacted under GW Bush) remain without any action by today’s Congress to change them, but even fewer than 5500 under the Obama deal for a $5 million exemption and a mere 35% top rate.
Under no theory of accounting or finance is allowing people to keep their own money a “giveaway.”
Whatever the tax system, the inflammatory language hurts the lefty cause.
What is money?
With a standing army to steal it, and a banking to inflate it, what is money?
And what value other than from the source?
Just slightly left of Thomas Jefferson!
Under no theory of accounting or finance is allowing people to keep their own money a “giveaway.”
Taxation is theft? Really?? Well, in that case I plan on paying *no* taxes next year, just like most U.S. corporations (http://www.reuters.com/article/idUSN1249465620080812?sp=true) and so many rich people (http://www.quickanded.com/2010/02/effective-tax-rates-of-the-richest-400-americans.html).
Oh, wait… I forgot –when ordinary peons like me refuse to pay taxes, it’s called “felony tax evasion” and you go to prison. Guess I’ll have to keep on paying for corporate welfare, foreign wars, and bailouts for Wall Street banks!
It’s a giveaway relative to the rest of the population when estates that have not been taxed in 100 years pass on to heirs marked to market without even paying capital gains taxes.
It’s also a giveaway when you consider that working people have been paying extra Social Security taxes the past 28 years in order to build up reserves , while we have systematically undercollected funds for the general fund during that time under the theory that it would grow the economy faster. The economy has not grown faster, and thus collecting the taxes due on these estates is a reasonable way of making good on part of the $trillions of obligations of the general fund, first of all to Social Security, and to everyone else who holds treasury debt as well.
I expect that there are Americans who support the confiscation of family land when the children of a deceased individual can not pay the estate taxes.
OT: Democrats Added Ban On Gitmo Detainee Transfer To Omnibus Spending Bill
http://tpmmuckraker.talkingpointsmemo.com/2010/12/the_gitmo_detainee_transfer_ban_was_added_by_democ.php?ref=fpb
“The Obama administration has loudly opposed a provision of the omnibus spending bill, passed last week by the House, that would ban the transfer of Guantanamo Bay detainees to U.S. soil, even for trial.”
“According to sources on both sides of the House Appropriations Committee, which had purview over the legislation, the bill was written entirely by the Democratic side. It was revealed to Republicans only hours before the vote. No amendments were allowed on the House floor. No Republicans voted for it.”
Speak, leftists…
MG no one has ever found a single real life example of a family farm being lost because of estate taxes.
But it is really being Christian of you to pay higher income taxes and weaken your chances of accumulating a fortune so that some heirs and trust fund babies will never have to pay taxes on their inherited wealth.
Up at Golden Pond in Maine (site of the movie On Golden Pond) land values have increased from the 1930’s to a million $ for an acre plus, and local taxes reflect this. So the grandkids may or may not be able to afford the taxes. The burden, of course, is to sell the land and make do with one’s life situation. Is that the implied example?
How come they can do that for some bills and not others?
On Great Pond (On Golden Pond movie fame) has lots for sale at $ 1 million – $million range, with only modest summer houses. The grandkids can’t afford the taxes (perhaps also property taxes) sometimes, because the taxes reflect the increase in value from fifty years ago…is this an example implied?
How come they can do that for some things and not others?
Yes, that’s one example. Today, there are examples where families not only can’t pay the estate tax without selling some of the land but have no hope of paying the property taxes as well. It’s difficult to get loans against large tracts of property at the moment in the State of Georgia, for example. And buyers are not lined up to buy some of these land holdings. The string has run out.
There will probably be more property lost this year due to the inability to pay property taxes than any year in recent memory. Locally, I have been stunned to read about this situation. Some of the property holdings are tied up in estate proceedings and it’s clear that they can’t even pay the property tax let alone any other assessments.
Good question. I don’t recall, though, that this has been uncommon under Pelosi’s rein.
Why did the Democrats do this? It certainly fired up the White House.
>Under no theory of accounting or finance is allowing people to keep their own money a “giveaway.”
If I provide someone a service for less than it costs me, how should I account for it? Marketing? Goodwill? Not at all?
That depends on how good looking she is.
Since you’re an expert on estate tax returns can you tell me that nobody has had to sell an inherited asset (business, real estate, etc.)to pay the estate tax?
See real example for Great Pond. Your question is nonsensical for that example.
Or even in general.
I see. So why don’t you call out spencer for his comment about losing a family farm? How would he know? Has he looked at the last ten years of estate tax returns? I’ve heard the same statement on this blog and others for years. But, since this is such a data driven blog let’s see spencer’s data? The estate planning world has hundreds of anecdotal stories of families losing assets to a distressed sale to pay the estate tax ( many of these stories are public record) so I am curious where the data is to back up spencer’s claim.
The suggestion was made in the heat of elections for several cycles that family farms were at risk due to the estate tax, but no examples were ever linked to by the people making the claims, in this case Republicans.
Losing assets is an entirely different question than losing a farm. Of course people lose assets…spencer’s claim was never about assets in general. That is a silly strawman.
However, inn the heat of past election cycles the example of losing family farms was used repeatedly as a result of the ‘death tax’, but as far as I know no examples were ever produced by the people making the claims. I believe that was spencer’s shorthand remark.
Farms have been ‘lost’ by relatives for lots of reasons but the major reason being federal estate taxes was not proven…on a state by state basis I am sure there are many ways for family to bypass that dilemma if the family wished to continue on…many dairy farms in the NE states found it unprofitable to continue and sold to regional companies due to low dairy prices and high costs of needed equipment and machinery., and the fact that city jobs had vacations and holidays unclike a dairy farm. Many farmers here and in the midwest also found it difficult to find part time help to cover the time ‘to be on vacation’.
Farms in other areas also run into high maintenance costs as individual farms, and have pooled resources. Locally consumers can buy shares of a crop ahead of time of planting to help spread the risks inherent in farming due to weather and to ‘loan’ the farmer money for initial plantings costs as well.
Or alternatively, “I worked really hard for it and so it is mine” divined right?
I believe the current proposed initial starting point is $5 million and $10 million for a couple so the tax is after that. The exemption is high enough that the families impacted number only the 5000 range.
In the past I believe it was about $1 million before kicking in? Of course that amount was determined with a lot of caveats for other exemtions. Maybe Linda Beale can help out.
Yeah it was $1,000,000 per person in 2000. $2,000,000 per couple.
Nobody here said anything about family farms except spencer. Let’s see the data.
Nonetheless I can’t believe that the Obama regime gave Kyl what he’s been after, unsuccessfully, for years. Either the regime is incompetent or they understand what a piece of pure symbolism the estate tax is. As I have written about a number of times in these comment areas, few truly wealthy people pay the full tax. No matter what Linda wants the U.S. is not going to do away with discounts, trusts, life insurance, family foundations and charitable deductions or dozens of other strategies that help the hyper wealthy avoid the full tax if they desire.