Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Politics and Other Controversies
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 11-15-2007, 08:48 AM
 
19,198 posts, read 31,395,701 times
Reputation: 4013

Advertisements

Quote:
Originally Posted by InformedConsent View Post
The estate tax wipes out small family-owned businesses and farms. Gone. Poof. I've seen it many, many times.
No, you haven't. Because it doesn't happen. This is so much right-wing mythologizing and nothing more. Even the American Farm Bureau (which strongly supports repeal of the inheritance tax) has admitted that it wasn't able to find a single case of a family farm being lost as the result of estate tax burdens. Lots of other reasons why heirs declined to continue farming, but not that one. A similar situation exists with family-owned small businesses. To begin with, they have to have an adjusted valuation of several million dollars in order to have any inheritance tax exposure at all. For another, small businesses of that size that actually anticipate continued operations upon the death of the proprietor develop a plan for continuity of operations. This is a normal part of being a business person. Annual gifts, bypass trusts, and decreasing term life insurance to cover any projected inheritance tax liability are but some of the ways that those roughly one in twenty small businesses that face any inheritance tax exposure at all can avoid it.

Quote:
Originally Posted by InformedConsent View Post
It's not easy to tell a family that they're going to have to liquidate much of what their loved one worked for their entire life to pay the estate tax bill.
And the reason for that would be the grave difficulty involved in finding anyone to whom it could accurately be told.

Quote:
Originally Posted by InformedConsent View Post
The super-rich may be able to afford to pay the estate tax bill, but it's crushing and devastating for many below Buffett's and Gates' level.
Utter hogwash. Among the small universe of estates that actually owe inheritance taxes, at the 5th percentile, one would expect to pay the tax at a rate of less than 1% and to owe something on the order of $10K. At the median, one would expect to pay the tax at a rate of about 10% and to owe something on the order of $125K. At the 95th percentile, one would expect to pay the tax at a rate of about 25% and to owe something on the order of $1.5 million. The bottom line is that there is no inheritance tax burden at all unless you are quite wealthy. The quite wealthy themselves pay trivial amounts of tax, the really wealthy pay more significant amounts, while only the super wealthy actually pay any substantial amounts.

Repeal of the inheritance tax would amount to nothing more than about $30 billion worth of annual welfare subsidies to the super-rich that would be paid for by the rest of us. It's pretty much as simple as that.
Reply With Quote Quick reply to this message

 
Old 11-15-2007, 08:53 AM
 
19,198 posts, read 31,395,701 times
Reputation: 4013
Quote:
Originally Posted by tablemtn View Post
As I recall, there was a proposal to raise the estate tax threshold to eight million dollars, from whatever it used to be. Eight million is a fairly large family business, or a gigantic farm. I wouldn't be so worried about that aspect of the law at that threshold.
Interestingly perhaps, the proposal to raise the exemption for family farms and small businesses to $8 million was shot down in the Senate by the Republican proponents of inheritance tax repeal -- the same people who popularize the mythology of 'lost' family farms and small businesses as a justification for eliminating the tax altogether. To some observers, it seems like these folks care a lot more about shielding the unrealized capital gains of the super-rich form eventual taxation than they do about any family-run operation of any size or sort...
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 08:55 AM
 
Location: the very edge of the continent
88,648 posts, read 44,393,360 times
Reputation: 13565
Quote:
Originally Posted by Manigault View Post
Anyone with a modicum of advance planning can avoid paying the estate tax.
Not always.

Quote:
To say it wipes out small businesses and family farms is really inaccurate.
To say it never wipes out small businesses and family farms is inaccurate. It happens in a small percentage of cases, but it does happen.

There are ways to reduce the estate tax bill. A Family Limited Partnership is one way, but the IRS has successfully challenged some of those cases. Any method involves tradeoffs that may or may not be workable for the people involved.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 09:02 AM
 
1,409 posts, read 4,851,962 times
Reputation: 486
Buffett is a MORON!!! "Only the richest" includes farmers, small/family-owned businesspeople, Mom-and-Pop proprietors etal. who are often nearly bankrupted when their father/head-of-household dies and they get slapped with this confiscatory tax! Talk about compounding their grief...

Families who get slammed with the Death Tax often have no other choice but to close the business, sell the farm, etc.

Liberals always lament how Wal-Mart is "killing" small communities, destroying family-owned businesses, putting specialty retailers and unique boutiques outta business, etc. Well heck...this deplorable Death Tax has done immeasurably worse damage than any big-box store or franchise restaurant chain!

This doofus Buffett recently said he "doesn't pay enough tax" himself. Fine, Warren...write a bigger check if you want to!!! Just don't be a d@mn demagogue and insist that hardworking people with barely 1/10,000 of your net worth be burdened with this despicable tax.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 09:05 AM
 
Location: Londonderry, NH
41,478 posts, read 59,590,047 times
Reputation: 24857
Death Tax - Purest right wing neocon propoganda.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 10:51 AM
 
5,110 posts, read 7,115,710 times
Reputation: 3116
Quote:
"Only the richest" includes farmers, small/family-owned businesspeople, Mom-and-Pop proprietors etal. who are often nearly bankrupted when their father/head-of-household dies and they get slapped with this confiscatory tax! Talk about compounding their grief...
No, it does not.

Quote:
Families who get slammed with the Death Tax often have no other choice but to close the business, sell the farm, etc
There is no death tax.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 10:58 AM
 
17,290 posts, read 29,314,236 times
Reputation: 8690
Quote:
Originally Posted by InformedConsent View Post
The estate tax wipes out small family-owned businesses and farms. Gone. Poof. I've seen it many, many times. It's not easy to tell a family that they're going to have to liquidate much of what their loved one worked for their entire life to pay the estate tax bill.

The super-rich may be able to afford to pay the estate tax bill, but it's crushing and devastating for many below Buffett's and Gates' level.
This is such BS.

ANYONE who has a "small family farm" can take easy estate and business planning steps before they die to avoid the estate tax.

At my law office we do significant amounts of estate planning and only rarely do we run into anyone with an estate large enough to be hit with the estate tax in a way that makes complicated trusts, etc. worthwhile.

A little planning BEFORE death can go a long way.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 01:29 PM
 
Location: Tolland County- Northeastern CT
4,462 posts, read 7,977,171 times
Reputation: 1237
Buffett is a wonderfully clean fresh breath of air in the greed and corporate monoliths we have had born from nearly 30 years of 'conservatism'. The Reagan Revolution is slowly dying because times and human events change-even in the USA.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 01:46 PM
 
7,330 posts, read 15,333,684 times
Reputation: 3800
I don't see why anyone cares. What does Jimmy Buffett know about the Estate Tax?

I do really like "Fins", though.
Reply With Quote Quick reply to this message
 
Old 11-15-2007, 01:58 PM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,245,231 times
Reputation: 7621
Quote:
Originally Posted by saganista View Post
No, you haven't. Because it doesn't happen. This is so much right-wing mythologizing and nothing more. Even the American Farm Bureau (which strongly supports repeal of the inheritance tax) has admitted that it wasn't able to find a single case of a family farm being lost as the result of estate tax burdens. Lots of other reasons why heirs declined to continue farming, but not that one. A similar situation exists with family-owned small businesses. To begin with, they have to have an adjusted valuation of several million dollars in order to have any inheritance tax exposure at all. For another, small businesses of that size that actually anticipate continued operations upon the death of the proprietor develop a plan for continuity of operations. This is a normal part of being a business person. Annual gifts, bypass trusts, and decreasing term life insurance to cover any projected inheritance tax liability are but some of the ways that those roughly one in twenty small businesses that face any inheritance tax exposure at all can avoid it.


And the reason for that would be the grave difficulty involved in finding anyone to whom it could accurately be told.


Utter hogwash. Among the small universe of estates that actually owe inheritance taxes, at the 5th percentile, one would expect to pay the tax at a rate of less than 1% and to owe something on the order of $10K. At the median, one would expect to pay the tax at a rate of about 10% and to owe something on the order of $125K. At the 95th percentile, one would expect to pay the tax at a rate of about 25% and to owe something on the order of $1.5 million. The bottom line is that there is no inheritance tax burden at all unless you are quite wealthy. The quite wealthy themselves pay trivial amounts of tax, the really wealthy pay more significant amounts, while only the super wealthy actually pay any substantial amounts.

Repeal of the inheritance tax would amount to nothing more than about $30 billion worth of annual welfare subsidies to the super-rich that would be paid for by the rest of us. It's pretty much as simple as that.
Very interesting post, but I'm still confused as to what the real scoop is on this issue.
Take a look here (Specifically take note of the section starting with "2006 Federal Tax Rates for Estates and Trusts"):

Tax Law Changes for Gifts and Estates and Trusts (http://www.irs.gov/formspubs/article/0,,id=112782,00.html - broken link)

This seems to indicate the tax rate is MUCH higher than you mention. Same thing here:

Guide to Estate and Gift Taxes

What am I misunderstanding here? Are the links talking about something different entirely? If so what? Have to admit I'm pretty ignorant of this particular topic and have no idea who to believe. In today's world it seems that everyone has an agenda and lies for it on a regular basis.

Ken
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top