Why stop with any of the taxes liberals now stand for? I think we should double the taxes for sports events period. Especially those who can afford season tickets. Sports is a luxury and others don't like it just like cigarettes or anything else liberals are for taxing to death!
Here is my take on it. Since most wealth is in the form of unrealized and therefore untaxed capital gains AND because heirs receive a step up in basis for the inherited assets AND because the capital gains rate is low I think the estate tax is actually equitable. Now with that being said... there is no estate tax this year, and next year it will return and possibly with big changes. One thing the Democrats want to eliminate is the step up in basis. So if you inherit a million dollar house that cost 40 grand 70 years ago you inherit it at the historical cost. This would mean that if you sold the house for a million bucks 960 grand would be subject to the tax whereas presently noting would be subject to ltcg. If this gets pushed through it would make the estate tax equivalent to stealing.
It really depends who you listen to. I have seen estimates range from the high 90s to as little as 30%. The problem is that it is a politically sensitive issue and alot of the studies leave out certain classes of assets. For example one conservative study that quoted the 30% number only considered stocks and bonds. They neglected to use REAL ESTATE. The primary residence is the most valuable asset for most folks who are subject to the tax. So the methodology was very flawed. The 90% seems much more likely to me for two reasons. One being the amount of income derived from long term investments is really high, especially for the super rich. The second is that the smaller estates that end up paying income tax are generally heavy on the personal residence.
Well, since the cutoff for estate tax is 3.5 million, I don't think I would agree with that. I think most $4 million estates are not composed primarily of the primary residence. Those folks have significant investments. The home is the major wealth of many middle-class individuals, but few of them are ever subjected to estate taxes.
i dont know, im not a constitutional lawyer. i dont see an inherent difference between taxing income and taxing a dead man's money. if anything, income should be taxed less. right? just like the rationale for reducing cap gains tax, if you tax income there is less incentive for people to work. if you tax estates, then there is more incentive for people to spend and children to contribute to the economy.
i know one area the federal government could cut that would fix the economy several times over. All the money put into a drug war that will never end, and that will never be won by the federal government. War On Drugs Clock
The 3.5 million dollar exemption is a thing of the past. This year there is no federal estate tax and no step up in basis, which could be really costly to heirs. When the tax returns next year, if no action is taken by congress, we will go back to the million dollar exemption and 55%rate. The only big change that is being talked about is the elimination in the step up in basis. I don't think the Dems have the stones to do it, but it is causing a lot of concern for estate planners.
