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You're going to have to explain to me why farmers are so much more deserving of this special exemption that a family that has worked together to build up a machine shop over three generations and has dozens of employees who are then driven out of their jobs when the family has to sell the business to pay the taxes?
"Yes, I have a specific situation in mind"
Actually those farmers have very little liquidity until they cash out.
Asset wealthy but cash poor because everything they have is invested in land, livestock, crops, machinery.
They are not like Trust Fund babies that get monthly allowances based on stock and RE holdings.
Even the poorest people can get treatment for cancer. My mother was one of them.
Am sorry, but no; not all "poor" persons in the USA receive healthcare for cancer, and or not at the same level as someone with good to excellent private health insurance.
Know personally of several persons who died of things like colon cancer for want of good or any medical treatment.
Qualifying for Medicaid varies by state, and what is "poor" in one may not be so in another.
This idea that estate tax pushes family/small farms to be broken up is largely a myth. But it keeps giving GOP something to chew upon and make great noise about in efforts to repeal all estate taxes.
Just as with family businesses it isn't estate taxes per se that cause things to fail, but often mismanagement by the heir or heirs.
In that case it pays to sell the farm before you get sick and die cause having to give up nearly 1/2 in taxes will for sure destroy the farm as they'd have to sell off assets to raise the money and without those assets the farm couldn't continue.
The current exclusion is up to $5.5 million. Bernie's proposal lowers it to $3.5 million.
Of course, the estate tax dates back to 1916, with variations prior to that (including 1802). The current rates are much lower than during the 1940s and 50s.
I have no difficulty with the estate tax. However, I do wish that they would make a 'farm' exemption, so that you do not have these family farms having to sell off a portion of the acreage in order to pay the tax.
I recall in law school, my estate professor talked of how the estate tax essentially arose from our Puritan roots, who held the theory that each man had to provide for himself or earn his own way through life.
There was also concern about avoiding systems in countries like England in which entire wealthy estates would pass down to the eldest son, generation after generation. To our puritan nature, such inherited wealth was an abhorrence.
Right now, the 'exempted' value of an estate is some 5.7 million dollars.
That amount is double for married couples, almost 11 million USD as of the last tax "reform".
Despite all the moaning and noise very few estates pay any sort of meaningful death taxes. Congress has created so many exemptions and raised limits that only a very small number of estates are subject to death taxes.
In that case it pays to sell the farm before you get sick and die cause having to give up nearly 1/2 in taxes will for sure destroy the farm as they'd have to sell off assets to raise the money and without those assets the farm couldn't continue.
The current exclusion is up to $5.5 million. Bernie's proposal lowers it to $3.5 million.
Read above links: few if any "small" farms are paying estate taxes. Those that do largely are of their own failure to take advantage of the vast and numerous exemptions and other provisions in tax code.
Many farmers and ranchers don't want lawyers, accountants and other professionals nosing around their affairs. So they either go it alone when it comes to estate planning, and or do nothing substantial. Since we none of us know when death will come a calling this leaves an estate open to the consequences of poor to bad planning.
Guess what the final outcome will be? No matter how much you tax the wealthy, you can't get enough healthcare to save everybody all the time. People who have friends and family that die will be enraged that this 'tax the rich' scheme does not save their loved ones. They will rise up and claim some final retribution.
But guess what,
"IN THE LONG RUN WE ARE ALL DEAD'
That amount is double for married couples, almost 11 million USD as of the last tax "reform".
Despite all the moaning and noise very few estates pay any sort of meaningful death taxes. Congress has created so many exemptions and raised limits that only a very small number of estates are subject to death taxes.
And Bernie's proposal nearly halves it to $3.5 million.
Most couples don't die together at the same time so it's usually a single person that dies and leaves the wealth.
Actually those farmers have very little liquidity until they cash out.
Asset wealthy but cash poor because everything they have is invested in land, livestock, crops, machinery.
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They didn't want to cash out, they wanted to continue the business. Asset wealthy but cash poor describes virtually every business I've ever worked with, including duPont and Westinghouse. These corporations and individual companies do not leave masses of cash lying around, they invest it in the business.
"That's why it's called working capital"
And Bernie's proposal nearly halves it to $3.5 million.
Most couples don't die together at the same time so it's usually a single person that dies and leaves the wealth.
Does not matter when each partner dies; for estate purposes a married couple is treated as one unit. Thus the exemption still remains nearly eleven million even if one partner dies ten years after the other.
This one of the benefits gays were jumping up and down about when pushing for SSM legalization on federal level.
They didn't want to cash out, they wanted to continue the business. Asset wealthy but cash poor describes virtually every business I've ever worked with, including duPont and Westinghouse. These corporations and individual companies do not leave masses of cash lying around, they invest it in the business.
"That's why it's called working capital"
Keeping buckets of cash lying around makes a company a very attractive target for a take over.
IIRC the irony is via tax code companies are far better off with debt than having cash.
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