Inheritance Taxes

[Martin Hash]

It’s a mathematical certainty that if you have a 1% advantage at a casino, eventually you’re going to own the house. Then you’ll own the next one, and the next one, and so on… There are people in this country who are born blessed with much more than a 1% advantage over the rest of us. The top 1% already own 38% of the wealth, and since math hasn’t changed, those people are going to own even more in the future – barring some kind of redistribution… Or revolution. If the Nouveau Aristocracy of this nation think The People will “eat cake” while they accumulate more and more of this country’s bounty, then heads are going to roll. In fact, those Neocons who think their wealth is being taken from them at the point of a gun haven’t seen nuttin’ yet if the current trend continues.

Redistribution of wealth through inheritance taxes is not an ethical issue – it is essential to the stable continuation of this nation. It’s a matter of economics and predictable human response, not socialist moralizing. In America you have the right to accumulate as much money as you possible can during your lifetime. You can spend it as frivolously, as consumptively, or as benevolently as you want. But you do not have the right to create a fiefdom for your heirs. If your sons and daughters have the merit to rebuild on your remaining empire after you're gone then all power to them, but they’re going to have to be almost as good or lucky as you were.

[John]

Best thing about the estate tax is that the people being taxed are not able to complain or even notice that which they were not able to take with them.
Even with the estate tax (which right now doesn't exist btw), there are beneficiary loopholes one can drive a truck through.
http://www.businessweek.com/investor/co ... 609897.htm

[Martin Hash]

Washington State has an Estate Tax after $2,000,000, but probably shouldn't or you get capital flight. The Federal Estate Tax Exclusion was $3,500,000 last year, which is more than ample. (It was $2,000,000 the year before and I agree with that more, especially since you double these numbers in a marriage).

I agree with most of the tax exemptions (almost all charitable) as a way for Government to "direct" how the estate would best benefit society while still appealing to the legacy aspect of the individual and heirs. Though, in general, I'm pro-government oversight, people in government, as everywhere else, are sorely tempted by power and money, easily as much as the heirs, so a tradeoff of who distributes the money is okay with me.

Further expanding on this topic: As a way to redistribute wealth, I'd actually prefer if the individual gave away the entirety of their wealth to whomever they wanted (not capped like it is now). For example, if they were a billionaire, they could make a 1000 people millionaires. It's not that I want the money to go to "government" - it's that I want the money redistributed to make way for the next generation of entrepreneurs.

[John]

Under pre-Bush law and Bush law you can do what you are saying net of the gift tax liability. If you are saying gifting it away would avoid the estate tax, that would effectively be a repeal of the tax.
The estate tax (both versions) actually applies to such a small number of very wealthy people, it really bothers me when certain Senators and other people that should know better support its repeal. All they are doing is acting upon the orders of a very small group of wealthy individuals (Walton family et al). Or they are selfishly trying to make the rules such that they can pass their entire estate to their own children.
A certain local politician who is soon to be replaced argues that the estate tax hurts small businesses and farmers. That is bull hockey. There are special provisions for these entities.

[John]

Oh I get it. You are saying rather than the $13,000 annual gift exemption, make it a one time up to $1 million per person exemption or $1 million per person inherited from the estate provision.
That would make for a huge incentive for people to be very very nice to those possessing great wealth.

[Martin Hash]

There's a one-time 1 million "gift exemption" now but it is limited to 1 person (or partial).

Heirs are already enticed to be nice to their rich relatives - this would simply give everyone a chance to be a suckup (humor). Seriously though, if a rich individual could give it to the government or give it to their longtime acquaintances - there's going to be a lot more rewarded merit. Whether someone has to be a suckup for "American Idol," their boss at the factory, or the rich old lady with all the cats - hey, it's all part of the lottery of life.