Hate estate taxes? Boo effin’ hoo.
Personally, I think all inheritances should be taxed as income from the first dollar. If I inherit money, it’s effectively income. If you want your kids to have your money tax-free, give it to them before you die.
If you have a household wealth of $2 million, you are in the top 10% of American households. Having more wealth than 90% of Americans means you are, by definition, wealthy. If your heirs must pay up to a 15% tax on the amount over $2 million that they didn’t earn, I have zero sympathy.
“Last week, Chamber chief executive Jim Rooney wrote to Governor Maura Healey, House Speaker Ron Mariano, and Senate President Karen Spilka, urging them to adopt another tax reform bill to build on the one Healey signed in 2023.
“Chief among the requested changes is ending the state’s estate tax, which kicks in if an individual dies and leaves assets to heirs totaling more than $2 million in value. The chamber also wants to see business taxes and short-term capital gains taxes reduced, noting that the Tax Foundation ranks Massachusetts in the bottom 10 states in terms of tax policy.
“We are consistently ranked as a ‘high cost of doing business’ state,” Rooney said in an interview. “These taxes are some of the reasons why.”
Color me skeptical. I’d love to see polling data showing that businesses avoid MA because of estate taxes.
But whattabout . . .
“It’s almost like a penalty for saving and wanting to pass things to your children after you’ve already paid taxes on it,” Rooney said. “It’s not [only] a wealthy person’s issue anymore.”
Check your privilege. (a) anyone who invests their savings must pay capital gains on those investments, even the part that just keeps the principle up with inflation, so estate taxes are no more a “penalty for saving” than capital gains taxes; (b) we pay taxes on money we already paid taxes on all the time: I pay taxes on my income, and I still pay sales tax, gasoline tax, etc. Money is taxed every time it changes hands, so there’s nothing special about taxing inheritance; (c) if your estate is worth over $2 million, you’re a wealthy person.
The other propaganda line is that estate taxes are “death taxes.” Nobody is taxed for dying. Death is free.
Estate taxes in the crosshairs in MA
If you have a household wealth of $2 million, you are in the top 10% of American households. Having more wealth than 90% of Americans means you are, by definition, wealthy. If your heirs must pay up to a 15% tax on the amount over $2 million that they didn’t earn, I have zero sympathy.
“Last week, Chamber chief executive Jim Rooney wrote to Governor Maura Healey, House Speaker Ron Mariano, and Senate President Karen Spilka, urging them to adopt another tax reform bill to build on the one Healey signed in 2023.
“Chief among the requested changes is ending the state’s estate tax, which kicks in if an individual dies and leaves assets to heirs totaling more than $2 million in value. The chamber also wants to see business taxes and short-term capital gains taxes reduced, noting that the Tax Foundation ranks Massachusetts in the bottom 10 states in terms of tax policy.
“We are consistently ranked as a ‘high cost of doing business’ state,” Rooney said in an interview. “These taxes are some of the reasons why.”
Color me skeptical. I’d love to see polling data showing that businesses avoid MA because of estate taxes.
But whattabout . . .
“It’s almost like a penalty for saving and wanting to pass things to your children after you’ve already paid taxes on it,” Rooney said. “It’s not [only] a wealthy person’s issue anymore.”
Check your privilege. (a) anyone who invests their savings must pay capital gains on those investments, even the part that just keeps the principle up with inflation, so estate taxes are no more a “penalty for saving” than capital gains taxes; (b) we pay taxes on money we already paid taxes on all the time: I pay taxes on my income, and I still pay sales tax, gasoline tax, etc. Money is taxed every time it changes hands, so there’s nothing special about taxing inheritance; (c) if your estate is worth over $2 million, you’re a wealthy person.
The other propaganda line is that estate taxes are “death taxes.” Nobody is taxed for dying. Death is free.
Estate taxes in the crosshairs in MA
One of the biggest ripoffs of the Government is the stepped up basis on death. So you did well. Your $10,000 investment in IBM or Microsoft or Oracle or whatever, is now worth $15 million. If you cashed it in while living you would pay pay 20% or whatever the capital gains rate is or $3 million to the government. Not a bad trade off–you get to keep $12 million after taxes. But if you hold onto it until you die, your heirs get a stepped up basis of $15 million and they can liquidate it during your funeral and absent estate taxes the government gets nothing for your remarkable gain of turning $10,000 into $15 million.
@Terry,
My preference is that inheritance is taxed as income. However, taxing the earnings as capital gains would be an improvement over the current system. You can already give your heirs their inheritance tax-free* if you do it while you’re still alive.
*up to a certain annual threshold