Obama's position on the estate tax

[Vuk]

I have read several articles on Obama's position on the estate tax that all contradict each other.
1. (http://www.newsmax.com/Newsfront/Boone-estate-robbery-Obama/2012/06/22/id/443223?s=al)
2. (http://www.foxnews.com/politics/2012/02/14/proposed-obama-budget-includes-surge-in-tax-hikes/)
3. (http://money.cnn.com/2012/02/12/news/economy/obama_taxes/index.htm)

Not one of them source their information, so I have no way to check and see which one of them (if any) are telling the truth. Does anyone have any (well sourced) info on Obama's stance on the estate tax?

[HoreTore]

I can't answer your question. So, I'll derail your thread by adding this:

People seem to more readily accept that the possibility to improve is lessened, than having something they already have lessened. Unfortunately, what makes economic sense is theother way around.

Taxing what people already have(estate, wealth, etc) is better in an economic sense than taxing their ability to improve(income tax).

[Philippus Flavius Homovallumus]

I can't answer your question. So, I'll derail your thread by adding this:

People seem to more readily accept that the possibility to improve is lessened, than having something they already have lessened. Unfortunately, what makes economic sense is theother way around.

Taxing what people already have(estate, wealth, etc) is better in an economic sense than taxing their ability to improve(income tax).

No, taxing economic activity, what they buy is better. Taxing wealth and estates is worse than taxing incomes (especially death tax) because it interupts inheritence which is a key pillar of social mobility. Contrary to popular belief, most people cannot change classes in a generation, but families can inherit wealth across generations - you get a white collar job as a clerk, your child gets to go to university.

Wealth tax has no practical effect on the Rich, unless they are deeply unfortunate and it destroys the estate, what it really does is prevent the poor from accumulating wealth.

[Crazed Rabbit]

Sales tax is probably the best.

Anyways, Vuk, I'll make this easy for you; believe the CNN article.

PS - Newsmax? Seriously? :stare:

CR

[Vuk]

While this is an interesting conversation, could you please save it for another thread, so as not to distract people from my question? (or at least talk about it after my question is answered) Thanks.

[Vuk]

Sales tax is probably the best.

Anyways, Vuk, I'll make this easy for you; believe the CNN article.

PS - Newsmax? Seriously? :stare:

CR

I googled Obama Estate Tax and they were the first relevant articles that came up.
Could you give me a reason to trust the CNN article? I doubt Fox would just outright lie about Obama like that, as that would destroy their credibility. My guess is that either Obama had two positions at two different times, and they are picking which to report on, or that the truth lies in some detail.

[Major Robert Dump]

I hate to break it to you, Vuk, but the estate tax is nothing more than a talking point by the right. Republican controlled Congress has had the opportunity to kill the ET several times in the past twenty years -- to include a Republican President/Republican Majority -- and they never, ever do.

Do you know why?

Because it makes up an inoordinate amount of the federal tax coffers, and no one has any inkling on how to replace that lost money. I believe it is second only to the income tax.

And a side issue on the matter is how to give "reparations" to people who were screwed leading up to the repeal. I can see it now, grandma dies and no one reports it because at the end of FY 2013 the estate tax goes away. Imagine having to pay it on a dead relatives estate and 1 week later the law changes lol

It goes without saying the Democrats will always support it because it is a tax.

Also, FYI, the Waltons have spent a smooth 100 million since Sam died trying to get the law repealed, because when old lady Walton passes the owners of Wal Mart are going to have an estate tax bill in the billions. I seriously think sometimes the spending habits of our government reflects tax days like when the Waltons die, kind of like in the lead-up to the Facebook IPO a bunch of California legislators were talking about how the taxes on the stock sales would help the California economy. Yeah

[Vuk]

I hate to break it to you, Vuk, but the estate tax is nothing more than a talking point by the right. Republican controlled Congress has had the opportunity to kill the ET several times in the past twenty years -- to include a Republican President/Republican Majority -- and they never, ever do.

Do you know why?

Because it makes up an inoordinate amount of the federal tax coffers, and no one has any inkling on how to replace that lost money. I believe it is second only to the income tax.

And a side issue on the matter is how to give "reparations" to people who were screwed leading up to the repeal. I can see it now, grandma dies and no one reports it because at the end of FY 2013 the estate tax goes away. Imagine having to pay it on a dead relatives estate and 1 week later the law changes lol

It goes without saying the Democrats will always support it because it is a tax.

Also, FYI, the Waltons have spent a smooth 100 million since Sam died trying to get the law repealed, because when old lady Walton passes the owners of Wal Mart are going to have an estate tax bill in the billions. I seriously think sometimes the spending habits of our government reflects tax days like when the Waltons die, kind of like in the lead-up to the Facebook IPO a bunch of California legislators were talking about how the taxes on the stock sales would help the California economy. Yeah

First of all, I didn't start this thread to discuss it. I just want to know if anyone has an answer to my question. Second of all, I never gave my opinion on the estate tax.

[ajaxfetish]

I doubt Fox would just outright lie about Obama like that, as that would destroy their credibility.

That ship has already sailed.

Ajax

[Strike For The South]

Tax the bourgeois

If your Daddy has more than a cool 5 million in the bank, you have already been given plenty of oppurtunties in this life.

I will not shed a tear.

[Crazed Rabbit]

First of all, I didn't start this thread to discuss it. I just want to know if anyone has an answer to my question. Second of all, I never gave my opinion on the estate tax.

You realize you posted this in the Backroom, right? :eyeroll:


Because it makes up an inoordinate amount of the federal tax coffers, and no one has any inkling on how to replace that lost money. I believe it is second only to the income tax.

Call me skeptical. This pro-estate tax article says it makes up less than 1%: http://online.wsj.com/article/SB10001424052748704358904575477593075638722.html

CR

[ICantSpellDawg]

The estate tax is a stupid argument. The tax has been higher and there is precedent for it, governments are free to tinker with it. My problem is with corporate and income taxes generally. What happens after someone dies who earned millions of dollars or more in life is not my concern. If the government believes that It can tax people after their death than so be it. My concern is with earning wealth and spending money as you see fit in life, not creating dynasties and controlling money after you are dead.

Death tax is one of the many red herrings in politics that most people, except the wealthiest of the wealthy who have never heard of trusts and giving to others, need not worry themselves about.

[Strike For The South]

The estate tax is a stupid argument. The tax has been higher and there is precedent for it, governments are free to tinker with it. My problem is with corporate and income taxes generally. What happens after someone dies who earned millions of dollars or more in life is not my concern. If the government believes that It can tax people after their death than so be it. My concern is with earning wealth and spending money as you see fit in life, not creating dynasties and controlling money after you are dead.

Death tax is one of the many red herrings in politics that most people, except the wealthiest of the wealthy who have never heard of trusts and giving to others, need not worry themselves about.

Lately you seem to be only concerned with yourself.

I realize people are going to devote the majority of their time to causes that affect them directly but you seem to take it to an entierly new level.

Such base and vapid ethics

[a completely inoffensive name]

I doubt Fox would just outright lie about Obama like that, as that would destroy their credibility.

Oh wow, wow, WOW.

This statement is....the statement that just perfectly describes you in a nutshell, Vuk.

[Greyblades]

Could you give me a reason to trust the CNN article? I doubt Fox would just outright lie about Obama like that, as that would destroy their credibility. .

AHAHAHAHAHAHAHAHAHAHAhahahahahah...



*PFFT*HEHEHEHEHEHEHEHEHEHEHEEHEHeheheheheheh....




*PFFFFT* AHAHAHAHAHAAHAHAHAHAHAHAHOHOHOHOHOHOHOHHOHO...

[gaelic cowboy]

I seriously doubt anyone on the org would ever be affected by this kind of "Death Tax" as people seem inclined to call it.

Never ceases to amaze me though how this non-issue keeps coming up every election and of course the Republicans never cease to wave it like a voodoo doll at the people.

Even with farming familes of which prob over 80% of farms are no more the 500acre in the USA meaning most people will never pay this tax.

They rile people up with tales of "We had to sell the farm to pay Daddies death taxes boohoo boohoo" the reality is the majority of repub voters will never ever pay this tax.

[HoreTore]

A death tax is awesome.

Reap the benefits of a lowered tax rate all your life, then pay Uncle Sam back when you have no need of money anymore. A win-win for everyone.

[gaelic cowboy]

A death tax is awesome.

Reap the benefits of a lowered tax rate all your life, then pay Uncle Sam back when you have no need of money anymore. A win-win for everyone.

hmm there is a germ of an idea here Horetore it might encourage people to spend all there money prior to death which would boost vat receipts etc etc.

Place like Florida would absolutely boom with consumer spending in the local economy.

[HoreTore]

hmm there is a germ of an idea here Horetore it would also encourage people to spend all there money just prior to death which boosts vat receipts etc etc.

I'm not that big on encouraging spending... Enviromentalist reflex, I guess.

[gaelic cowboy]

The sales tax and vat on renewables and all that good stuff is less meaning you buy it :yes:

[rory_20_uk]

Making changes to a system one has to consider the ways the system will alter to take this into account, which seemingly isn't often done.

Death taxes would encourage one to pass on one's assets prior to death to avoid it by a number of different methods. The UK basing care costs on one's worth is already creating the incentive to divest assets lest the state gets them all anyway.
Income tax can make jobs less attractive than elsewhere. Many jobs are international. My industry still has the almost requirement to work in the USA for a bit. Is living in the UK that much better than having 3 weeks of holiday here? If there was a 40% difference in salary I might think differently.
Sales tax is often called a "tax on the poor" (although it could be stratified by item with no tax on certain items) and might encourage purchases abroad (the rush to Calais for fags and booze a classic example), although
Property tax seems good to have, but a pain to instigate as it would massively dampen the value of property. So, getting to one is political suicide.

~:smoking:

[HoreTore]

Devaluing property is absolutely vital.

In the current situation people move money from the productive sector to property. It should ne the otherway around. So, dump taxes on businesses, especially startups, and crank up the tax on property(and other things people out their money in which doesn't create anything).

[rory_20_uk]

Absolutely - if there was an annual property tax of a percentage of a property's worth this would slash property costs, help first time buyers, generate income for the state that could offset other taxes, and reduce the bills for social housing indirectly.

Those with would hate it of course, especially the elderly who think it is their right to live in a large house that they bought decades ago for a fraction of its current value. If they can't afford to heat it, rather than think they should downsize the government should give them free money to do so. Help for first time buyers of course, but the hardship should fall elsewhere. Such as the young whilst the elderly gripe that the vast amounts that Social and Medical care provide isn't enough as they paid their taxes - and cheerfully forget that life expectancies have shot up and so in a very real sense they haven't paid sufficient taxes.

As Greece and California proves so well, rarely does direct democracy lead to self-sacrifice.

~:smoking:

[HoreTore]

When I become dictator, I'm making you finance minister, rory.

[Major Robert Dump]

First of all, I didn't start this thread to discuss it. I just want to know if anyone has an answer to my question. Second of all, I never gave my opinion on the estate tax.

#1 I already know your opinion
#2 Obama is a Liberal Democrat so of course he approves of the estate tax and raising it more

gaelic cowboy: Although not at the levels being discussed here, the estate tax does actually affect lower earners. For example, my parents home was a gift through an inheritence, which they moved into after they sold their home. If they outright left the home to me in their will, I would be taxed on this home as it has already been gifted once. Of course, there are easy ways around this

Crazed Rabbit: Hmmm, yeah I see the 1%. So maybe it's a little further down the tier than I expected. For some reason I was under the impression it was below income but above capital gains, I'll keep looking. My argument still stands the same, though, in that past opportunities to kill this tax have been ignored due in large part to there not being an alternate source for the income

[Major Robert Dump]

Doh, I forgot about payroll tax. Payroll and Income both are @40%, corporate around 10%, and the final 10 is comprised of the estate tax, excise taxes and everything else. Color me newly informed.

At the very base of the issue, it is unfair taxation. It is double taxation. But at the same time, I really don't care, I just accept it as it has always been around and always will be around.

[ICantSpellDawg]

Lately you seem to be only concerned with yourself.

I realize people are going to devote the majority of their time to causes that affect them directly but you seem to take it to an entierly new level.

Such base and vapid ethics

Who else is there? I'm all for protecting the wealthiest of the wealthy from the death tax if it keeps them donating cash to the G.O.P.
I just personally don't care about their issue. Why should I? This whole web of "I care about this issue, this issue, this issue" is such a joke. Find your core, vote on your core and let anybody with a good idea try their core issue as long as it isn't too stupid. If you are running for representative elected office then I understand that you need to get the support of constituencies, but we are arguing on the internet and benefit in no way from having our own planks on ideas that we all must realize that we poorly understand. Leave the strong feelings for people who have strong feelings.

Vapid and base ethics. I don't believe in political ethics, just regular ethics and regular ethics don't demand that I care about what wealthy people do with their money after they are dead. Take it from them, give it to their kids, smoke it, blow it out of your chode.

[HoreTore]

At the very base of the issue, it is unfair taxation. It is double taxation.

This is the kind of argumentation that kills our economy. This is a moral objection, and so isn't relevant.

That it's double taxation is a good thing. Taxing something twice is a lot more effective than taking the entire tax in one go.

[Lemur]

[The estate tax] is double taxation.
Depending on how you look at it, you could make this argument for every tax ever levied. The corporation paid its taxes before paying me my salary, so clearly my income tax is double taxation. Moreover, when I buy a stick of gum and pay sales tax, I already paid my state and federal income tax on my salary, so the money in my pocket has already been taxed twice. Clearly the sales tax on the gum is triple taxation. And so on and so forth.

[ICantSpellDawg]

Depending on how you look at it, you could make this argument for every tax ever levied. The corporation paid its taxes before paying me my salary, so clearly my income tax is double taxation. Moreover, when I buy a stick of gum and pay sales tax, I already paid my state and federal income tax on my salary, so the money in my pocket has already been taxed twice. Clearly the sales tax on the gum is triple taxation. And so on and so forth.

I agree with Lemur here and was thinking about the double, triple, quadruple taxation that we already experience. Governments have the ability to tax us, so their tax schemes just need to make sense and encourage growth and the freedom to make your own financial decisions for your personal enjoyment of life. Because people are dead, their wishes to enjoy their lives are nullified. They can give money away to the people they'd like in life, but after they are dead, they've lost their voice (literally).

Give the items to your spouse, gift up to the annual limit to your children every year that you are getting close to doomsday and sell the rest to them for unrealistically low amounts of money. For example, give your kids the annual max, then they can use that money to buy your garage full of cars, boat etc. They've spent bottom dollar and you've evaded taxes, with them only paying sales tax at a fraction of what you'd pay in death.

Sound complicated? Hire an attorney to handle it for you you rich old goober. Thank you for your job creating service, and burn in hell for all of the people you've screwed over to get to the top.

[Kralizec]

Doh, I forgot about payroll tax. Payroll and Income both are @40%, corporate around 10%, and the final 10 is comprised of the estate tax, excise taxes and everything else. Color me newly informed.

At the very base of the issue, it is unfair taxation. It is double taxation. But at the same time, I really don't care, I just accept it as it has always been around and always will be around.

I don't follow. You mean that the employer has to pay one sort of tax on wages before, and the employee has to pay another sort of tax after pay day?

In the Neth's employers have to withold taxes on wages too, but legally speaking they do so on behalf of the employee. The employee only has to pay taxes over his wages at the end of the year if it turns out that not enough taxes were withheld in the first place - usually that's the case when he has other sources of income besides his job, so that he ends up in a higher tax tier.

Double taxation is usually understood (here, at least) to refer to a cross-border situation where different tax regime cause a good or service to be taxed twice for the same reason. Lemur's post, while correct, is also rather obvious when you think about it. Every coin and bill, except those recently printed, have changed ownership lots of times and each transaction has been taxed. The "death tax" may sound unfair to people, but at the core it's still about a transfer of money and assets from one person (now dead) to another. There are good arguments against the tax, but not that it's double taxation :shrug:

[Major Robert Dump]

I don't follow. You mean that the employer has to pay one sort of tax on wages before, and the employee has to pay another sort of tax after pay day?

In the Neth's employers have to withold taxes on wages too, but legally speaking they do so on behalf of the employee. The employee only has to pay taxes over his wages at the end of the year if it turns out that not enough taxes were withheld in the first place - usually that's the case when he has other sources of income besides his job, so that he ends up in a higher tax tier.

Double taxation is usually understood (here, at least) to refer to a cross-border situation where different tax regime cause a good or service to be taxed twice for the same reason. Lemur's post, while correct, is also rather obvious when you think about it. Every coin and bill, except those recently printed, have changed ownership lots of times and each transaction has been taxed. The "death tax" may sound unfair to people, but at the core it's still about a transfer of money and assets from one person (now dead) to another. There are good arguments against the tax, but not that it's double taxation :shrug:

Yes, an employer has to pay the government a tax for each head he employs, and then the employee turns around and pays a tax for each dollar he earns.

This is why I am so amused by the left wingers who don't understand business very well, and think an employer should basically be paying for everything related to that employee (insurance etc); there really are people who think that way. Where anyone comes up with the idea that healthcare is the job of the persons employer is just beyond me....

[Lemur]

Where anyone comes up with the idea that healthcare is the job of the persons employer is just beyond me....
Blame World War II (http://en.wikipedia.org/wiki/Health_insurance_in_the_United_States#The_rise_of_employer-sponsored_coverage).

[Ironside]

Yes, an employer has to pay the government a tax for each head he employs, and then the employee turns around and pays a tax for each dollar he earns.


Is it intended for pensions? I know that our equivalent is used for that.

[Major Robert Dump]

For pensions?? LOL no. It goes into general revenue to be squandered.

Lemur: Let me rephrase what I am saying here:

I think employee-provided health coverage is great. Freakin Wonderful. Awesome. If a company can do this for its people it will instill loyalty, have a healthier workforce and get pretty good sales when people realize they treat their employees right.

I think requiring employers to provide health coverage is stupid, and in the cases of smaller business, the alternative methods of contributing to employee healthcare plans all turn into a complete money-sink for both the employer and the employee, where the insurance company makes off like a bandit.

I don't see why a company is any more responsible for paying my dental insurance than they are for making my car payment and paying for my funeral. There are probably people out there who would argue that my employer should pay for that, too, as I have heard some suggest that employers also subsidize employees educations

[HoreTore]

Yes, an employer has to pay the government a tax for each head he employs, and then the employee turns around and pays a tax for each dollar he earns.

This is why I am so amused by the left wingers who don't understand business very well, and think an employer should basically be paying for everything related to that employee (insurance etc); there really are people who think that way. Where anyone comes up with the idea that healthcare is the job of the persons employer is just beyond me....

Left wingers?

Ehm, what? A left winger would say that government should pay for everything, of course, not the private sector... Or, of cours, let the state run the entire economy.

[Major Robert Dump]

Left wingers?

Ehm, what? A left winger would say that government should pay for everything, of course, not the private sector... Or, of cours, let the state run the entire economy.

A significant segment of left wing, liberal thinkers in this nation have an "us vs them" mentality when it comes to employers and employees. In many cases this is entirely justified. In other cases, it is understandable, because a person who has been "the help" all his natural life will be inclined to side with "the help." But I feel that a lot of liberals, particulalry the young ones, downplay the whole job creation/continuation in terms of smaller business entities; on the flip side, conservatives overplay their hand and every time businesses have to comply to a new law, the sky starts falling.

The fact that payroll taxes make up an equal amount of revenue for the fed seems as if it is a double edged sword. When employment and GDP is down both of these will drop. As for the estate tax, people will always die, but I would be curious to see what sort of percentage this estate tax would make of the federal coffers based on which filthy rich people died that year. For example, if old man Hilton and old lady Walton died in the same fiscal year, I would be willing to bet that total would be more than 1%

[HoreTore]

A significant segment of left wing, liberal thinkers in this nation have an "us vs them" mentality when it comes to employers and employees. In many cases this is entirely justified. In other cases, it is understandable, because a person who has been "the help" all his natural life will be inclined to side with "the help." But I feel that a lot of liberals, particulalry the young ones, downplay the whole job creation/continuation in terms of smaller business entities; on the flip side, conservatives overplay their hand and every time businesses have to comply to a new law, the sky starts falling.

The fact that payroll taxes make up an equal amount of revenue for the fed seems as if it is a double edged sword. When employment and GDP is down both of these will drop. As for the estate tax, people will always die, but I would be curious to see what sort of percentage this estate tax would make of the federal coffers based on which filthy rich people died that year. For example, if old man Hilton and old lady Walton died in the same fiscal year, I would be willing to bet that total would be more than 1%

Of ciurse they're silly, they're centrists - being silly is part of their job description ~;)

(and yes, this was just a meaningless jab at how the political centre in America is pushed way to the right, meaning that your "left wing" is my "centre and centre-right")

[Vuk]

#1 I already know your opinion
#2 Obama is a Liberal Democrat so of course he approves of the estate tax and raising it more

gaelic cowboy: Although not at the levels being discussed here, the estate tax does actually affect lower earners. For example, my parents home was a gift through an inheritence, which they moved into after they sold their home. If they outright left the home to me in their will, I would be taxed on this home as it has already been gifted once. Of course, there are easy ways around this

Crazed Rabbit: Hmmm, yeah I see the 1%. So maybe it's a little further down the tier than I expected. For some reason I was under the impression it was below income but above capital gains, I'll keep looking. My argument still stands the same, though, in that past opportunities to kill this tax have been ignored due in large part to there not being an alternate source for the income

You already know my opinion, even though I have never stated it on this forum and do not know you in real life? I guess you are a mindreader then. Congrats.

Do you have anything to back up Obama supporting raising it?

[TinCow]

No, taxing economic activity, what they buy is better. Taxing wealth and estates is worse than taxing incomes (especially death tax) because it interupts inheritence which is a key pillar of social mobility. Contrary to popular belief, most people cannot change classes in a generation, but families can inherit wealth across generations - you get a white collar job as a clerk, your child gets to go to university.

Wealth tax has no practical effect on the Rich, unless they are deeply unfortunate and it destroys the estate, what it really does is prevent the poor from accumulating wealth.

This is completely incorrect. It would be correct if the estate tax applied to all estates, but it does not. Even when 2013 rolls around and the tax returns in full force, it will only apply to estates over $1m. If you stand to inherit over $1m, your family is not poor. The estate tax only impacts people who (1) grew up in highly privileged families and (2) did not work for the money they are about to receive. Even then, they will still inherit staggering sums of money. A don't have much sympathy for someone who's complaining because they only received $5.05m from their $10m inheritance. Those peoples' parents clearly did not instill in them a work ethic.

[Major Robert Dump]

This is completely incorrect. It would be correct if the estate tax applied to all estates, but it does not. Even when 2013 rolls around and the tax returns in full force, it will only apply to estates over $1m. If you stand to inherit over $1m, your family is not poor. The estate tax only impacts people who (1) grew up in highly privileged families and (2) did not work for the money they are about to receive. Even then, they will still inherit staggering sums of money. A don't have much sympathy for someone who's complaining because they only received $5.05m from their $10m inheritance. Those peoples' parents clearly did not instill in them a work ethic.

I am getting state inheritence taxes mixed up with the "death tax."

If inherited an estate worth 100k tomorrow, when I filed my state tax return I would owe 10% of the value. If I needed to liquidate some of the estate (to cover the taxes or for whatever reason) and I got a capital gain on its base cost, then I would also have to pay a capital gains tax on top of the 10%.

Each state is different, everyone may want to check their state

http://www.retirementliving.com/taxes-by-state


Vuk: You are correct. I am a mind reader. Cookie please.

[ajaxfetish]

Vuk: You are correct. I am a mind reader. Cookie please.

Some minds are pretty easy to read. I'll be waiting for a more impressive demonstration before I part with any of my cookies.

Ajax

[TinCow]

I am getting state inheritence taxes mixed up with the "death tax."

If inherited an estate worth 100k tomorrow, when I filed my state tax return I would owe 10% of the value. If I needed to liquidate some of the estate (to cover the taxes or for whatever reason) and I got a capital gain on its base cost, then I would also have to pay a capital gains tax on top of the 10%.

That's not correct if you're in Oklahoma. Oklahoma currently exempts the first $3m of the estate, with the graduated tax only applying to amounts over and above that. If you inherited an estate worth 100k tomorrow, you would owe nothing.

http://www.tax.ok.gov/oktax/forms/45499.pdf
Exemption limits are described on page 6.

I highly doubt if there is any state that imposes an estate tax which does not include a very sizable exemption.

[Strike For The South]

Some minds are pretty easy to read. I'll be waiting for a more impressive demonstration before I part with any of my cookies.

Ajax


where is my Citizen Kane Clapping gif?

[Major Robert Dump]

That's not correct if you're in Oklahoma. Oklahoma currently exempts the first $3m of the estate, with the graduated tax only applying to amounts over and above that. If you inherited an estate worth 100k tomorrow, you would owe nothing.

http://www.tax.ok.gov/oktax/forms/45499.pdf
Exemption limits are described on page 6.

I highly doubt if there is any state that imposes an estate tax which does not include a very sizable exemption.

Now I feel dirty for not having to pay taxes on my imaginary inheritence, but then I remember I havent paid taxes in 2 years so I feel clean again.

Funny, that was a link from my own link.

So I am only on the hook for capital gains/investments. Yeeeeeeeeeeeeeeeeaaaaaaaaaaaaaaaaaaaaaaaaaaah:sweatdrop:

[Crazed Rabbit]

Tincow -a moderately sized family farm could easily be worth several million dollars. I definitely would not consider kids who grew up farming highly privileged.

The estate tax does break up family businesses and hurt the economy thusly. If you want to target rich families only you'll need to jack up the exemption level past $5million. And if the kids helped build that family business, they definitely worked for that money.

CR

[TinCow]

Tincow -a moderately sized family farm could easily be worth several million dollars. I definitely would not consider kids who grew up farming highly privileged.

The estate tax does break up family businesses and hurt the economy thusly. If you want to target rich families only you'll need to jack up the exemption level past $5million. And if the kids helped build that family business, they definitely worked for that money.

CR

Why are these hypothetical people running their multi-million dollar farm entirely as personal property rather than as a business or partnership? There are many ways to structure a family-owned business so that the majority of its assets are not subject to the estate tax. The estate tax is designed to hit personal property, not businesses.

[Strike For The South]

I stopped reading after "family farm"

[Crazed Rabbit]

Why are these hypothetical people running their multi-million dollar farm entirely as personal property rather than as a business or partnership? There are many ways to structure a family-owned business so that the majority of its assets are not subject to the estate tax. The estate tax is designed to hit personal property, not businesses.

Are ownership stakes in such business not hit with the estate tax then?


I stopped reading after "family farm"

Thanks for sharing.

CR

[Beskar]

I believe most farms are considered as limited companies or kin now, at least in the UK, which doesn't suffer from the same penalties and actually provides a lot of advantages such as able to get cheaper insurance, etc. Not sure of how it is in the USA, but TinCow probably knows a few recommended legal routes where families don't miss out where farms with large value assets are involved.

[Lemur]

Tincow -a moderately sized family farm could easily be worth several million dollars. I definitely would not consider kids who grew up farming highly privileged.
If only family farms that stayed in the family were exempt from all federal inheritance tax ... oh wait, they already are. Estate tax only kicks in if they sell out or do not farm.

I know, I know, you're really talking about all family businesses everywhere. But the truth of the matter is that a stake in an LLC or corporation is valued much more flexibly than a hard percentage ownership of real estate. So yes, if your family owns a golf course, you will take much less of a tax hit if you are a partner in the business than if they will you the fairway and clubhouse.

Sheesh, hasn't anyone on this board ever spoken to an estate attorney?

[Kralizec]

If only family farms that stayed in the family were exempt from all federal inheritance tax ... oh wait, they already are. Estate tax only kicks in if they sell out or do not farm.


Is that how it works in the US? IIRC in the Neth's inheritance tax over the net worth of shares in a liability company are postponed until you liquidate the company or sell it. And close relatives never pay more than 20% anyway. If the profits of a farm/company don't justify taking a mortgage or some other loan for that amount of tax you have to wonder why said farm/business exists in the first place.

Tax law is very, very boring over here though so I might not get the whole picture here. Is it any better in the USA? Never been in the position where I inherited anything either (fortunately).

[Lemur]

Is that how it works in the US?
Basically, if you inherit a farm of any size, and can demonstrate that you are actually working on it as a farmer, there is no federal inheritance tax. Nothing. On the other hand, if your parents leave you half a million acres in Georgia and you've never been there, it's treated as normal real estate. And as others have pointed out, this applies to federal estate tax. Each state has their own thing, although most make similar exemptions for working farmers.

[gaelic cowboy]

Tincow -a moderately sized family farm could easily be worth several million dollars. I definitely would not consider kids who grew up farming highly privileged.

The estate tax does break up family businesses and hurt the economy thusly. If you want to target rich families only you'll need to jack up the exemption level past $5million. And if the kids helped build that family business, they definitely worked for that money.

CR

Actually the majority of farms in America are well under 500 acre and likely would also be exempt.

Usually on a farm where this might be a problem they can get around by using a joint tenancy aggrement. Basically upon a father dying the son who is also a tenant would have full control of the farm without it needing to be passed on in a will therby avoiding estate taxes.

[TinCow]

Are ownership stakes in such business not hit with the estate tax then?

As a preface, I am not an estate attorney, so I'm not knowledgeable about all the intricacies of the system, particularly about any specific farm exemptions and whatnot. However, there are plenty of ways to structure a business which do not put the assets of the business at risk. In short, what you do is set up the business so that the business itself owns the assets. In the case of a farm, that would likely include the actual real estate, plus the expensive equipment and such. The owners of the business then become employees, and are paid out of the profits like in any normal business. Since the business owners do not technically own the farm (the business does), the estate tax does not apply to those portions of the business when someone dies. If structured properly, the assets that are in each individual person's name would be restricted to liquid assets and personal profits which do not impact the functioning of the business itself.

Think about it any other business context, and you'll see what I mean. Businesses do not go bankrupt due to the loss of half of their assets every time the business founder dies. Such a situation would, quite rightly, be outrageous and cause major problems for the economy. That's why it doesn't work like that.

On top of all of that, anyone who knows they will have estate tax issues can avoid some of it by simply planning ahead. Each couple can gift up to $26,000 per year to any person without incurring any tax penalties. So, if a family has two children and four grandchildren, they could give away $156,000 per year tax free. And that's assuming each child is not married. If they are all married, that doubles the number of people who can receive gifts, and allows a transfer of $52,000 to each couple, for a total of $312,000 per year to 2 married children and 4 married grandchildren. To ensure the money is handled properly, it can be put into trusts with whatever access restrictions on them that the parents desire. Plan far enough ahead, and a family can easily transfer millions of dollars to their heirs tax-free, all of which will reduce the exposure of their remaining estate to the estate tax as well. If you have so much money that even 10-20 years of structured trusts and gifts won't clear your exposure... well, perhaps you're just really, really wealthy and your heirs aren't at risk of being impoverished by the estate tax.

[Strike For The South]

Thanks for sharing.
CR


If only family farms that stayed in the family were exempt from all federal inheritance tax ... oh wait, they already are. Estate tax only kicks in if they sell out or do not farm.
?

Do you wish to continue with snark or will your ignorance about Agbuisness suffice?

I could have explained what the next 5 posts did, but that would take the sport out of it

[ICantSpellDawg]

Thanks, TinCow!

[Centurion1]

SFTS always seems to know what the answer is....... after the answer is posted.

The estate tax is what it is. I don't particularly like it but we all know it is probably not going to go anywhere. I wonder if in the case of a true small business it would be possible for the US government to distinguish between legitimate businesses and personal wealth. Because as CR said its not unfathomable to imagine a small business worth more than 2-3 million especially depending on its type and location.

[Strike For The South]

SFTS always seems to know what the answer is....... after the answer is posted..



I stopped reading after "family farm"


I mean really? Also the hiliraty that there is somehow this massive group of yeoman farmers still out there makes me double over in laughter.

[Centurion1]

I mean really? Also the hiliraty that there is somehow this massive group of yeoman farmers still out there makes me double over in laughter.

There are. Plenty of 500-1000 acre farms owned by a single family in comparison to the conglomerates I imagine you picture. And plenty of those farms are worth quite a pretty penny. Anyway theres a federal exemption for them so, meh.

As I said my concern is with other things.

[Major Robert Dump]

There are. Plenty of 500-1000 acre farms owned by a single family in comparison to the conglomerates I imagine you picture. And plenty of those farms are worth quite a pretty penny. Anyway theres a federal exemption for them so, meh.

As I said my concern is with other things.

I don't think you guys are understanding "small business" here as it is being discussed.

Yes. It is owned by a few people (mom, dad, grandma, uncle Lou) Anyone with half a brain would incorporate, for tax simplicity purposes and also legal protection, perhaps an LLC or the like, and move these assets from themselevs to the business. Even if they didn't incorporate and they did sole propiertership or used an umbrella, the assets would still fall under the company

These stories we hear of people lsoing the family farm is because granddad was scared of computers and shot at the census man. With a little planning and perhaps some help from his kids, these situations could be avoided if the business is structured properly if, in fact, it was business. Now if this was just some guy on some land who grew all his own food and meat, then there is a good potential that this land could cause tax issues. I know people like this. And I also know they sell their bumpber produce and livestock locally and under the table and dont pay taxes on it, and if they would just become a legit "business" this could be avoided

Personal credit and business credit are two different things.

I would like someone here to find me a "family farm" that is worth millions that has not been turned into a sole porpiertership, umbrella or LLC etc. I simply don't believe they exist

[gaelic cowboy]

I would like someone here to find me a "family farm" that is worth millions that has not been turned into a sole porpiertership, umbrella or LLC etc. I simply don't believe they exist

Any problem is likely to be connected with cereals and to put it frankly tillage farmers are way ahead of all other agri pursuits when it comes to financial engineering.