Death Tax issue coming up

[OhHorsePee]

The "death tax" is going to come to the senate floor soon as an issue. This is the cause of a lot of families losing farms and small businesses. The President and republicans have been trying to get this brought to an end and the democrats (senators) still want to keep it. The government only generates about 1% of this tax. It is a type of double taxation.

If you wish to let your voice be heard and help stop this type of taxing please let your senators know.

Thank you

Fran

 

[Miniv]

I agree. It is a STUPID tax.

And sometimes it's more than a double tax. The person had to pay taxes on their income. Then the death tax comes and takes more. Then, the person who inherits pays taxes on their income from their inheritance and when THEY die it gets taxed AGAIN.

MA

 

[Jill]

Actually, with the Estate Tax, with the proper estate planning (financial and legal), it is very possible to eliminate and / or negate the effect of much of this taxation. People need to be pro-active ahead of time. It involves working with an attorney (one who specializes in estate planning) and a financial advisor. My father and I help our clients with just this kind of thing.

We do these slides in our seminars that kind of make me want to roll my eyes because I think everyone who does what we do uses these slides, but we quickly review the amount of money lost to estate taxes and costs of some famous people.

Some people who DID NOT plan include:

Marilyn Monroe, who lost 55% of her $820,000 estate

Elvis Presley, who lost 73% of his $10,000,000 estate

Ogden Mills (secretary of the Treasury!), who lost 60% of his $9,500,000 estate

Some people who DID plan include:

William R. Hearst, who lost only 6% of his $57,000,000 estate

John Rockerfeller, Sr., who lost only 3% of his $550,000,000 estate

William Danforth (Ralston Purina), who lost only 2% of his $5,800,000 estate

In fact, Judge Learned Hand (US Appeals Court) is quoted as saying "There are two systems of taxation in this country, one for the informed and one for the uninformed.†You can look into Internal Revenue Code sections 170 and 664 -- or better yet, talk to an estate planner as this isn't something you can put into place without professional help.

Throughout the US history, the estate tax has been repealed a number of times, and always re-instated in a period of War (which is the current condition really!). Additionally, the concept behind the estate tax is that it is a way to level out the wealth of the nation, by forcing those who have been successful to share with those who have not been as successful. But, again, there are ways around it that are legal and used by the informed.

Not only that, but I believe that tied to the possible repeal of the Estate Tax is the elimination of being able to use a stepped up basis. This is where, when you inherit an asset (real estate, stock, whatever), you are able to use as the cost basis the value of the asset on the date of death -- not the actual cost basis of it when it was aquired by the person who passed away. If you think about it, since estate taxes only kick in on "large" estates, this loss of the stepped up basis effects far more people than the estate tax ever will.

 

[Pepipony]

I think its a stupid tax as well, since it is in essence a double tax. However I can understand why we still have it. Sad to say but I think most taxes will be raised within the next few years. How else will we pay off the deficit?

 

[Buckskin gal]

Repealing the death tax only helps the very wealthy.......and it is the very wealthy that want it done away with. Will just mean that the middle class will have to pay more to make up for it!

Mary

Actually, with the Estate Tax, with the proper estate planning (financial and .  If you think about it, since estate taxes only kick in on "large" estates, this loss of the stepped up basis effects far more people than the estate tax ever will.

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[susanne]

Absolutely true, Mary. Most of the "information" that has been disseminated about this tax is purely hype, even the term, "Death Tax".

In case anyone thinks that this is merely a liberal perspective, go back and read Jill's post. Jill is not only one of my favorite conservatives (

), but she is also in the business and extremely knowledgeable in these matters.

 

[Triggy&Blue&Daisy Too]

Actually I think Jill wasn't remotely speaking from a liberal's perspective: "In fact, Judge Learned Hand (US Appeals Court) is quoted as saying [b["There are two systems of taxation in this country, one for the informed and one for the uninformed.â€[/b] You can look into Internal Revenue Code sections 170 and 664 -- or better yet, talk to an estate planner as this isn't something you can put into place without professional help."

As one with a more conservative bent I do believe anyone rich or poor can choose to be informed and her post illustrates that even the weathiest can be stupid about their money matters. Liberals seem to be of the idea that it's better to take away from those who earned it by becoming informed and redistributing it to those who prefer to remain ignorant.

 

[susanne]

Actually I think Jill wasn't remotely speaking from a liberal's perspective:

She certainly is not, and that is absolutely not what I said.

 

[Jill]

Actually, I was just speaking from my perspective. It's the one with which I am most familiar

 

[Triggy&Blue&Daisy Too]

In case anyone thinks that this is merely a liberal perspective, go back and read Jill's post.

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Well then I guess I was mistaken

 

[susanne]

Perhaps I stated that in a way some would have trouble understanding...I said that Jill was NOT coming at it from a liberal perspective. Read it again, and if you don't try to give it a slant that is not there, or act as if you have the slightest idea of what I believe, it is very clear.

But screw it. I'm not going to bother explaining myself.

 

[Jill]

For what it's worth, I did understand what you meant!

 

[Triggy&Blue&Daisy Too]

Perhaps I stated that in a way some would have trouble understanding...I said that Jill was NOT coming at it from a liberal perspective. Read it again, and if you don't try to give it a slant that is not there, or act as if you have the slightest idea of what I believe, it is very clear.
But screw it. I'm not going to bother explaining myself.

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No dear what I read was that you said not that Jill was not coming at it from a liberal perspective but interpreted it the way it was written it is not only a liberal's perspective but also a conservative one hence the reference to Jill's post. And yes it was a misunderstanding so what, relax or are you the only one who can disagree with someone?

Now come on let's wish each other a "bless our little hearts"

and forget it.

I'm just cranky today and I apologise. Take it and run I rarely do.

 

[Jill]

I'm not sure that you all will appreciate this in the way it's meant (to make you laugh or at least smile) but I cannot help but think that death and taxes are not the only inevitable things in life... so is arguing on the internet!

 

[OhHorsePee]

Mercy sakes! Be it Democrat or Republican or Liberal, I am very happy to see people involved in polotics. I just perceived that since this does effect farm people (being hobby or working farm) that is would be a warranted issue to bring up. It does not just effect "wealthy" individuals but farmers that have had their farms for generations (from my understanding of the tax). Here is the email I received from the GOP that I thought I would share. I'm absolutely NOT trying to push a political issue down anyones throat, I just thought you would be able to see where I am coming from.

Thank you for reading my post and responding.

Fran

From: "Chairman Ken Mehlman" <[email protected]> Add to Address Book

To: [email protected]

Subject: Support Elimination of the Death Tax

Date: Thu, 1 Sep 2005 16:11:06 -0400 (EDT)

September 1, 2005

Dear Fran,

For the last four years, President Bush and Republicans in Congress have championed a pro-growth agenda that has brought tax relief to millions of Americans. Historic legislation in 2001 and 2003 put America on the track to economic growth, and today our economic outlook is bright. There is more work to do, however, to ensure that tax-paying Americans can keep more of their own hard-earned income.

When they return from their August recess, Senators will consider a key issue: elimination of the death tax. The death tax is an unfair double taxation of income, which hurts America's small businesses and farms and threatens job growth. Unfortunately, Senate Democrats are working hard to oppose our efforts to eliminate this unfair tax.

Will you help bring tax relief to more hard-working Americans? Call Senator George V. Voinovich at 202-224-3353 today and ask them to eliminate the death tax.

Our party's opportunity agenda means allowing families to keep more of the money they earn. The historic tax relief in the President's first term was only the beginning. Americans deserve a tax code that is simple and fair. The Senate needs to do its part by making tax relief permanent and burying the death tax forever.

Call Senator George V. Voinovich at 202-224-3353 today and ask them to vote to eliminate the death tax!

Make your voice heard on this important issue. Call Senator George V. Voinovich. Express your support for tax relief and economic opportunity.

Elimination of the death tax would be a victory for fairness and job creation. Working together, we can help eliminate the burden of the death tax once and for all.

Thank you,

Ken Mehlman,

RNC Chairman

 

[Jill]

There's just so much though that can be done if people take some action ahead of time. People concerned about this, REGARDLESS of if it is repealed, need to speak to financial planners and attorneys who specialize in estate planning. Setting up a by-pass trust is like Estate Planning 101 and can save the small side of large estates from all estate taxes. Then for bigger estates, there are more things that can be done. It is largly a voluntary tax and people can take action to protect their assets. Plus, like I said, it has been repealed and then re-instated a number of times so regardless of what happens, it makes sense to put some things into place in the event it goes away and then comes back. AS IT STANDS NOW, you could just plan to die in 2011, when it goes away, because it comes back in 2012 with the old exemption amounts if nothing is changed...

Also, it's worth mentioning here that people concerned about estate taxes tapping into the money and assets left to heirs should also consider protecting themselves against the number one thing that takes financially independent people into a welfare situation -- and that would be long term health care costs. Another subject, but it really does tie in if you realize how overwhelming the cost for this type of care can be and the entire reason to buy long term care insurance is to protect your assets.

 

[shminifancier]

Yes lets get rid of that tax once and for all.. And then lets work all together and get this Fair Tax System passed~!! This will be very good for everybody poor very poor Middle class rich and very rich,, Fair for everybody..WHATEVER YOUR POLITICAL leanings are, this is good for each and every one of us..

http://www.fairtax.org/

 

[Jill]

One thing I very much agree with in that email is that the Amercian public does deserve a tax code that is easy to understand and the current one truly is not. You should not have to hire professionals to help you apply the tax code to your advantage. It should be written so that a person of average intelligence can understand and apply what works for them.

 

[shminifancier]

One thing I very much agree with in that email is that the Amercian public does deserve a tax code that is easy to understand and the current one truly is not.  You should not have to hire professionals to help you apply the tax code to your advantage.  It should be written so that a person of average intelligence can understand and apply what works for them.

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That is what so good about The Fair Tax system...All Federal Taxes willl be at Time of purchase... Cool No imcome tax to be paid at the end of the year no Nothing to send to the Goverment..28% will be added to whatever you buy....Very good Idea..

 

[Jill]

But, that would actually cost many (most?) people more money. I happen to fall into the 28% marginal tax bracket after my deductions, but my EFFECTIVE tax is just over 16%... Which is not unusual. Remember, the tax brackets work so that your marginal tax bracket is the rate at which your last dollar of income is taxed, but for a married couple, on the first $14,000 of income, you pay 10%, then on from $14,001 - 56,800, you pay 15% ... maybe see below it makes more sense.

Joint return figures:

$0–$14,000 = 10.0%

14,000–56,800 = 15.0%

56,800–114,650 = 25.0%

114,650 –174,700 = 28.0%

174,700–311,950 = 33.0%

311,950 and up = 35.0%

So, see, looking at this, a 28% sales tax might actually cost the average person more assuming it's added to everything you purchase, including groceries, utilities... As much as I am in favor of saving and investing the ONLY thing money is actually good for is spending. It's no good to you until you turn it into something you need (or want).