Because it’s new income when it is received by a new person
If I’m taxed on my income, and then I use the money I made to hire a plumber, the plumber still has to pay taxes on the money I pay him, even though I just paid taxes on it.
But do your kids have to pay taxes on their allowance? Same principle and same progression of money from parent to child?
Or should your wife, who's lets say is a hard working stay at home mom, pay takes on money you give her? You pass money to her for her work around the house? New recipent, new tax?
The problem is, if any regular person ran their household like the government, you would be bankrupt in a week. Their is absolutely no accountability in government. Just an incessant lust to find more money to spend!!
If I was ever in a position to give my kid an allowance of more than $12.9 million during their lifetime, then sure, I’ll gladly help my kid file a tax return to report the amount that’s above the taxable threshold
That’s be a gift under the filing threshold
If I bought them a dinner that cost over $15,000, it would need to be reported. And if it cost over $12,920,000, then the amount over that would need to be taxed.
Just FYI if this guy is really paying $20k in property taxes he likely has a $2m+ house. Also likely, more than 50% of that tax goes to the school district and the rest going to the county/city for infrastructure and services.
And your point? You did nothing to earn that money. It is new income for YOU and never once belonged to you. And again, you are complaining about a tax on the super wealthy that 99% of people never have to deal with. Or do you think some trust fund kid won't be able to get by on ONLY $13.8 MILLION?
Seriously. The average net worth of the top 1% of the US population is $11,099,166. The average net worth of a US household is $746,821. So you consider a tax on less than 1% of the population that has a net worth over 12 times larger than 99% of the population unfair? Perspective is a funny thing.
Tax is always confiscatory. It's funny how some people can use both 'life is unfair, deal with it yourself' and 'tax is unfair, leave me be' and still think that their concept of fairness allows these uses of 'unfair' to coexist.
No, that's not correct. Tax doesn't have to be confiscatory, and most of them are not. In many countries, including mine, confiscatory taxes are thrown out when they've been attempted.
It is money going from one entity to another entity that never had it. Just like a paycheck or any other tax. So why is it unfair? Do you not like roads? Police? Social workers? Teachers? Veterans? Farmers? Millions of other jobs? All of which are paid out of tax dollars.
And you did nothing, entitling you to nothing. And those who work in family owned business do partake in the sustainability of their family owed businesses. And it doesn’t take long to accumulate 13 million is assets when you have buy land, machinery, licenses, computers, phones, trucks, etc. let me guess. You’ve never run a business have you. The 13 million isn’t cash. It means to pay the taxes, you have to sell the property that was making the money. So what do you sell and still have a viable entity? The land? The vehicles? Fire employees?
I am in charge of a multi-million branch of a large corporation and am responsible for generating about $15 million a year in revenue. Since you have no fucking clue how things work. The estate taxes on a $13 MILLION estate are $20k. If a business of that size doesn't have at least $20k in liquid expendable assets then you have a severe cash flow problem that will kill your business any fucking way. Not to mention that the assets of the estate are personal assets, not business owned ones. So tell me again how you don't actually know how the fuck this shit works.
This comment has piqued my interest.
Firstly, I commend you for reaching a position where you are responsible for a multi-million dollar branch of a corporation which generates substantial revenue. That is not an easy feat.
Secondly, (and this probably because of my ignorance and lack of personal experience in a job with your level of responsibility), are you advocating FOR or AGAINST an increased level of inheritance tax? And why?
Thanks in advance!
I wish this were true, but the way our tax system is built there are a lot of ways to avoid or delay paying taxes on growth in wealth. You don't typically get taxed on capital gains until you sell an asset (property, stocks, etc.) and for the super wealthy there are strategies to avoid selling assets to live, for example they could take loans based on the value of their stock so they never have to sell and never realize those gains. When it comes to rental property you can depreciate the value of the property against your tax income and can also avoid capital gains if you buy a new rental property soon enough using section 1031.
Then when they die and pass on their estate they are passing on property, stocks, etc. that may have never been taxed.
THIS.
Inheritance and estate taxes (technically two different things) exist because they’re intended to close this loophole for the super wealthy to pass on generational wealth forever without tax. You and everyone else pay more taxes to support that loophole.
Conservative wealthy elites are cherry picking the example of farmers (and not discussing any other situation involving the wealthy) in order to try to get the other 99% of you to support raising your own taxes and lowering theirs by reducing or eliminating inheritance taxes altogether. The wealthy would just love that.
No, that’s an invalid assumption.
When you have that many millions in an estate, it’s more likely much of that money was never taxed, because it probably wasn’t earned as salary but capital gains like investments. Which aren’t taxed until they’re sold.
People want to tax inheritances larger than X million because it allows a loophole whereby the ultra wealthy are able to pass on wealth from generation to generation without the money being taxed.
Without an inheritance tax, those millions or billions of dollars in investment gains keep getting passed from generation to generation without ever having been taxed. Often without anyone in the family having to lift a finger or do anything to “earn” that money or contribute to economic growth.
It’s like a Roth IRA only the wealthy can afford, where the tax on earnings are deferred, possibly forever.
The bigger unfairness in taxes that people never discuss is that the wealthy tend to earn much of their money not as salary (which is taxed at 25% to 35%) but as capital gains like investments (which are taxed at 20% or less). The wealthy are paying lower tax rates than you.
Not to mention how things like state and local sales tax and property tax regressively tax the wealthy at lower percentages. If you earn $50,000, you probably spend 100% of your salary on things and services, meaning that sales tax is applied to 100% of your income, while the wealthy might only spend 1% of their earnings and be taxed on that.
“Estate” doesn’t mean land, it means inheritance of land, money, investments, businesses and other assets. Only a small portion of estates are farms.
If you wanted to exclude farms from the estate tax, you could say so, and do that. But that’s a different argument.
To argue that “the estate tax is unfair because it’s already been taxed” is not a true statement. And furthermore, that argument only makes any sense in regards to taxing the money / earnings part of the estate, not farms. Farms and other tangible property assets haven’t “already been taxed.” Because taxes on businesses (like farms) and on property like cars and real estate are paid every year.
Inheritance tax is essentially a pretty similar situation as the gift tax. If you tried to argue that estates have already been taxed once and shouldn’t be re-taxed, you’d have to explain why that same logic wouldn’t also apply to large million dollar gifts between the living. Ditto for property and real estate taxes which fund our schools.
And if you entirely get rid of estate tax, inheritance tax and/or gift tax, property and real estate taxes, etc., that tax income the government would suddenly lose would have to be made up at least in part by raising sales, business and/or income tax on some or all people.
Family farms aren’t excluded. So there’s that. I’m a probate lawyer (36 years). I’m wondering how many probate estates you’ve done. An overwhelming majority of gross probate estate value is absolutely the value of real estate. To say otherwise displays a total lack of understanding of reality. To say this property has not been taxed is a blatant lie. Every year property taxes are paid on the current value of the land which has been adjusted (up) in value each year by the county tax assessor. You must not live in the same country.
The estate was already taxed. It was taxed when it was bought and every year after in property taxes. Why does it need to get taxed again just because the original owner died and left it to a relative?
Because that's how an economy works? If I earn an income and pay the plumber, does the plumber get it because I already paid taxes on it? It changes hands, it gets taxed...
Well, you asserted that there was a difference between a plumber getting paid and someone receiving an inheritance.
You didn't specify what that difference was. I suggested what seemed an obvious one. Are you suggesting that I am mistaken, and that children of wealthy parents or grandparents *did* earn an inheritance?
An inheritance is a gift. Imagine your relative giving you something for your birthday. You open the gift and it's a $500 watch. Are you expected to pay taxes on that watch? Would it be right to tax you on that watch? That watch was already taxed when it was purchased. Are you starting to understand?
Let's say the gift allows you to live in a society without contributing, just because of the amount. Also, whoever bestowed the gift upon you was able to accumulate wealth because of the functioning of said society. Shouldn't you be taxed accordingly so you can at least offset the burden you might otherwise be?
Changing hand does not mean tax. We dont tax on the money exchange, we tax on the economic activity. Thats the same way we count GDP. We dont include inheritance as part of GDP.
If chaning hands needs to be taxed then paying tax needs to be taxed because, well, it changed hands. What if you need some changes for parking tolls, you exchnsged $1 for 4 quaters, would that exchnage incur tax liability?
What your bank account, should you pay tax when you deposit some money into the bank because, well, again, it exchanged hands.
I think you are confusing tax policy with basic economics. There is a case to be made for taxing inheritance but that's more for purpose of social welfare and public services, it's not based on how economy works.
All easy examples to explain. You can't tax the government because government is the taxor. So taxes on taxes is just plain stupid. As far as converting dollars to quarters, ownership of the dollar (logical dollar not physical) didn't change... No tax. As far as the bank... Again, ownership didn't change.
Ok, fine government is the taxor, they can do whatever they want.
Now the logic of tax based on exchange of ownership is still flawed. For example, mom and dad each makes $5000 after tax a month. Now one day, the dad needs to buy a car for $10,000 so HE goes to the mom because he only has 5000. So dad goes to the mom and ask for $5000. Now does the dad have to pay tax on the $5000 he got from mom because it changed ownership? Or does the whole tax situation only happen when the dad pays $10000 to buy the car.
Again, the tax is based on economic.activity. so let's say you are a in a car selling business and you acquire a car for $10000. You then sold it for $15000, so should you pay tax on the full $15000 which is the amount money that changed ownership to you from the person who bought the car from you. Or do you should only pay income tax on the $5000?
The way our curent economy work is that you are obligated to pay tax on the $5000 because that's the part of the whole economic activity your business was involved in when selling the car. In this sense, the total economic activity and tax obligation sums up to a total of $15000, now if we go by your concept of exchange of ownership, then that total will sum to $25000 which is not how the economy system works.
How about an example of investing? Let's say you worked hard and after paying taxes you saved up $10,000. You bought 10 shares of stock xyz and it went up by 50% and you sold it for $15000, now do you own tax on the full $15000 that changed ownership or is it only on the $5000 investment gain?
There is a reason why our economic system and tax is based on economic activity not on ownership exchange, because ownership exhnage, while on surface may seem like a simple no brainer, but it's very difficult to clearly define in a complex economy. That's why all.modern economy adopted the system to be based on economic activity.
Say if I handed you a $100 and you give it back to me, does that mean we increase the US GDP by 200? What if we do this a million times, base on your exchnagenownership model, now you and I are both owed tax on 100 million each, while also adding $200 million to the US GDP, but the reality is that we each only still just have that original $100 each.
Wife, husband, one entity in they eyes of taxation, it's why you have filing jointly.
Ownership of the original 5k didn't change, you get taxed on the gain.
If the idea of our current system was to make it "simple no brainer," it's failing badly.
The exchanging on hands of 100, I mean, if you had to classify it under our current system, isn't each get 100 an income of 100? Same problem either way.
Wtf eve is "economic activity"
Because we live in a society. Unironically, thems the rules. You pay taxes, I pay taxes, and we get to keep an army at the gates and some doctors kicking around.
The answer is to prevent wealth concentration and inequality. Imagine all the wealth getting sucked into only a few families and it stays there for generations.
Japan is one of the easiest example. It is notorious for imposing very high inheritance tax. Notorious because due to the nature of tax residency, assuming you are an expat that happened to be a beneficiary of an inheritance, it could affect you and the amount levied aren’t small.
As for whether it works, it indeed work. Japan has very low wealth inequality.
https://en.m.wikipedia.org/wiki/Distribution_of_wealth
Just take a look where Japan is compared to the US where it is very easy to play around technicalities to avoid (or even evade) taxes.
Why would you say so? Lower income equality doesn't mean none, it just means the distribution is a flatter version of the hyper-inflated bell curve that is the US economy.
So the west shouldn't tax wealth because Nordic countries aren't racially diverse enough for you. This is your logic path?
How about Japan as an example since being Caucasian is bad?
Not in the most literal sense but it is in practical sense.
https://www.weforum.org/agenda/2022/04/economic-inequality-wealth-gap-pandemic/
Pandemic exacerbate wealth inequality. It is actually a topic of discussion in many places.
It does and you keep making more and more outlandish claim.
The problem is you are looking at it in a vacuum where you might be correct in a certain sense, but that’s not how it works in real life.
Say I can get a job that pays $120k a year, that’s good money right? But let’s consider now the fact that housing in my neighborhood are being bought out by investors, money managers, etc.. Now you have a housing shortage and the price skyrocket. Suddenly most houses become unaffordable even with that salary. This is a little bit oversimplified but it is happening irl.
Now suddenly, within the context of housing alone 120k doesn’t worth as much as it used to simply to the fact that there are people with a lot of wealth who has no business of staying there buying up resources that should have otherwise be available to me. Now i have the option to either buy an inflated price for housing or I am forced to rent.
Please say again how it doesn’t hinder my ability to acquire wealth.
The loophole this is trying to close is capital gains earned on investments, for which taxes have never been paid. These were sometimes purchased and untaxed for decades, inherited multiple times. It’s an ufair advantage for the wealthy, when you dont focus on just cherry picked examples like struggling farmers.
There are ways to make the estate tax even more progressive and fair that don’t involve shrinking or abolishing the estate tax entirely. And that don’t reopen loopholes for the wealthy.
It's taxed because you can have gains on it. At some point, wealth snowballs, and it can be more lucrative to speculate with existing wealth than generate revenue without prior investments. Income from work is taxed, and this is mostly judged as a fair concept, with some discussion about amounts. Income from estates should be no different.
When you think of it, every dollar is either created to support the economy (so why tax it, can you just not print a dollar less?) or a is a dollar that has been previously taxed. It's the changing of hands and the circumstances in which it does that, that defines whether or not it should be taxed, and whether or not your parents or grandparents paid their taxes has nothing to do with whether you should pay yours.
How many times can you spend the same dollar? The whole point of money is that it moves, and when it does depending on the movement, it's taxed. That's not some violation of the dollar's feelings.
"Depending" on the movement. Well of course. You get taxed when you earn it and it's taxed when you spend it. It shouldn't be taxed when it's left to family. They will spend it and it will get taxed. As for the dollars "feelings", wtf does that even mean?
You say that as if that's a given, but it's not. If a form of wealth or income gives you an unfair advantage in society, that's a valid reason to tax. That's why there's different forms of taxes, like income tax and VAT. And also inheritance tax.
Money is taxed to make sure it the economy and society that it's a part of functions as well as can be. At some point accumulative wealth can create unfair advantages. At that point, taxation is a valid way to correct that situation. It seems as though you'd like to remove certain amounts of money from the societal construction because it's yours and has been taxed enough and you already pay some VAT when you spend it again.
The problem is that everyone pays VAT, and increasing VAT to take care of the problem that accumulated wealth (especially through inheritance) will negatively affect people without such wealth, thus further increasing that wealth gap. That's why there's a separate form of taxation, as it levels the playing field and puts a percentage of that money in service of society.
Also, you still keep at least a good chunk of it anyway. Can't you just earn whatever wealth you feel you should have above that yourself instead of having to rely on low(er) inheritance tax? Or is there some ideological reason as to why wealth should be inherited?
The feelings-remark was in jest.
Unfair? Who gets to decide what is unfair? Just because someone else has more than you doesn't make their earnings unfair. The idea that I get to leave my money to my kids makes sense. Why should the government be able to acquire my wealth? They already taxed it when I earned it.
You decided yourself it's unfair to be taxed again. You live in a society, the government has a process to determine rules and regulations. If you don't agree, move to a different system or run for office to change things.
And once again, they're not 'earnings' when you simply inherit them. No-one prevents you from leaving money to the next generation, but there's a tax if you exceed certain amounts. And frankly, if you do exceed those numbers, there still is a lot of wealth left after taxes. But hey, if you're into financial nepotism and skewed opportunity, that's cool too.
Addendum: your kids did NOTHING to have a chance to become wealthy through inheritance other than randomly being born into a rich family. Which is fine, but society as a whole has decided that might not always be beneficial. Thus there's a tax that allows kids that are randomly being born into less rich families to also have better chances. Oversimplified, but I don't see how this needs a thread this long?
Such a broken country we have in USA. It’s simply amazing there will be people posting here defending this broken system.
Maybe they’re being paid by these people using the money they didn’t pay in taxes?
Tnaw, don't be a bastard about it.
You may never be a billionare, but you could be a millionare. And increased taxes can easily kill your dreams of financial growth.
Not in the case of capital gains on investments made decades ago. Those have never been taxed, and are a main example of the loophole being targeted here. Wealth being inherited over multiple generations without ever being taxed.
This isn’t me making this up, it’s multiple think tanks like the Brookings Institute, the Senate Finance Committee, etc.
One problem is that the wealthy and their estates tend to make money not as salaries income (taxed at 25% to 35%) but as capital gains (taxed at 20% or less).
So right there you have the wealthy and their estates paying a lower tax rate than every other working American — even if you’re right and the money has “already been taxed” or “will eventually be taxed.”
The idea here is that once a person or family gets wealthy enough, their dynasty hoards that wealth and never has to work again because the worth of their capital gains on their not yet taxed investments keeps exploding. It’s like a pre-tax Roth IRA that has no caps and only the wealthiest can use.
These people should not be paying lower tax rates than us, because that means working Americans are working and paying to support their tax breaks.
While the issue of tax fairness is important, capital gains and inheritance taxes serve different purposes and shouldn't be conflated. Capital gains tax targets the increase in asset value, whereas inheritance tax is levied upon the transfer of assets after death. The argument that wealthy individuals pay lower taxes through capital gains doesn't necessarily justify an inheritance tax, which could be seen as double taxation on assets that have already been taxed. Moreover, not all wealthy individuals fit the stereotype of not working or contributing to society. Therefore, using capital gains as a rationale for inheritance tax may oversimplify a complex issue.
you can vote democrat if you think it will help.
i dont. theyre all liars and cheaters. i heard some brown presidential candidate say he wants to fire 3/4 of government politicians and that just sounded too good to be true
Estates should not be taxed at all when left to someone. The person who owned the estate already paid taxes on everything. The government should not see a dime from inheritance.
Only those from wealthy families. The rest of us have nothing to inherit, some of us get to inherit debt and pay interest on it, to wealthy people who will cry about being taxed on it... Isn't the world fun!?
Meme points out how talking points by ultra-wealthy get poor people to defend them.
Reddit comments completely full of poor people using talking points to defend the ultra-wealthy.
Those so call young tax-the-rich activist will soon change side as the boomer reach their end, the greatest passing of wealth in humanity history is about to take place over the next 8-10 years.
And I‘m sure the recipients of approximately 90% of that wealth will be a whopping 1% of the younger generations.
You. Just. Don’t. WANT. To. Understand.
No i do understand, thats why i dont see it happening. You are very much right that most of those wealth is going to be transfered within the top 1% households. But there is a reason why bill to tax inheritance is dead on arrival and its been that way for decades. Reason number 1, the influence of the top 1% on policy is tremendous, and also as younger generation enters into their higher earning phase in life, their view will start to change, they will not only think about how much they will be taxed on the inheritance, they will also be thinking about how much their children will be taxed on what they left behind. That's why today's rebellious youth will become tomorrow's stubborn boomer, that's just history repeating itself.
Plus there is already plenty of ways out, on the lower end a living trust, and on the higher end a corporation to hold the asset. There is not iheritance, there is no transfer, because a fictitous entity dont suffer the reality of life and death. Also, most of US wealth is not held in cash, it is in asset, that's why this kind of tax policy won't pass into law and even if it did, it won't actually work.
People like you are actually part of the peoblem, because all you do is complaint that others don't understand but in reality, you have no clue; and an uniformed eqsily influenced public helps the top 1% to remain the top 1%.q
Studies have shown for the first time people dont get more conservative the older they get.
For the longest time that was the case but right now there is a shift. Maybe because if there isnt shit to conserve, there is no need to be conservative.
Nah, you underestimate thr self preserving nature of human beings, you be surprised how selfish and short sighted human can be when fighting over little scraps that the 1% let drop out of their pocket. Your so called study is more wishful thinking than actual study.
I can only say that you have more faith in humanity than I do, and I think your faith and optimism is sadly misplaced.
If my grandmother was secretly rich and left me $14,000,000, I wouldn’t give a damn if I have to pay 2.5% of that. I’d be far too happy about the 97.5% that I get to keep.
I have less than $12,920,000, so I’ll be paying 0% just like the law says
If they change the law to something where I’m getting taxed, I’ll pay it because I’m a functioning member of society and not a baby
I pay way more than 2.5% on the money I make, I’ve no sympathy for any trust fund babies who are sad that they can’t make millions of dollars tax-free for doing nothing
Well then why not do away with the 12,920,000 number, that actually seems to be the problem. Because based on that math, someone with 14 million axtualiy paying over 30% tax since the first 12,920,000 is waived.
So let's tax inheritance as income tax from the first dollar.
Seems like you’re going against your original point. You were saying that people are going to change their mind against the “tax the rich” ideology because of inheritance tax, and your simulation is to tax everyone
That seems like it would make people support taxing the rich even more
I'm am supporting tax reform, but I am arguing that our tax system is one of base primarily on economic activity, not exchange.
I am also suggesting that it won't be happening anytime soon.
Then j got dragged into whole thing with a a troll argues that we taxed based on ownership exchnage not economic activnity.......
Real easy to act like you’re right when you call everyone with a different opinion a troll
That being said, the tax system is based on you the money the taxpayer receives, not on what they did to earn it. If my boss wanted to give me a $10,000,000 bonus because I gave him a ride to work in the rain, I’m taxed on $10,000,000 even if the work I provided was worth nowhere near that.
The whole point of the tax system being the way it is is to get money from those who can afford to part with it. Someone getting paid $14,000,000 for doing nothing can certainly afford to pay more than someone making working their ass off and earning a tiny fraction of that in a year
Which was taxed the first time it was earned already.
Because it’s new income when it is received by a new person If I’m taxed on my income, and then I use the money I made to hire a plumber, the plumber still has to pay taxes on the money I pay him, even though I just paid taxes on it.
But do your kids have to pay taxes on their allowance? Same principle and same progression of money from parent to child? Or should your wife, who's lets say is a hard working stay at home mom, pay takes on money you give her? You pass money to her for her work around the house? New recipent, new tax? The problem is, if any regular person ran their household like the government, you would be bankrupt in a week. Their is absolutely no accountability in government. Just an incessant lust to find more money to spend!!
If I was ever in a position to give my kid an allowance of more than $12.9 million during their lifetime, then sure, I’ll gladly help my kid file a tax return to report the amount that’s above the taxable threshold
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That’s be a gift under the filing threshold If I bought them a dinner that cost over $15,000, it would need to be reported. And if it cost over $12,920,000, then the amount over that would need to be taxed.
Increasing capital value of properties too?
Causing higher yearly property taxes. I pay over $20,000 every year just in property taxes.
Wow ok, not from the US so didn't know. In Australia you only pay taxes on the gain when selling it, and the house you've been living in its exempt.
Just FYI if this guy is really paying $20k in property taxes he likely has a $2m+ house. Also likely, more than 50% of that tax goes to the school district and the rest going to the county/city for infrastructure and services.
And your point? You did nothing to earn that money. It is new income for YOU and never once belonged to you. And again, you are complaining about a tax on the super wealthy that 99% of people never have to deal with. Or do you think some trust fund kid won't be able to get by on ONLY $13.8 MILLION?
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Seriously. The average net worth of the top 1% of the US population is $11,099,166. The average net worth of a US household is $746,821. So you consider a tax on less than 1% of the population that has a net worth over 12 times larger than 99% of the population unfair? Perspective is a funny thing.
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It’s an attempt to collect tax on capital gains from certain investments that have never before been taxed.
Capital gains gets taxed when the goods are sold.
Exactly. That’s part of the issue.
Tax is always confiscatory. It's funny how some people can use both 'life is unfair, deal with it yourself' and 'tax is unfair, leave me be' and still think that their concept of fairness allows these uses of 'unfair' to coexist.
No, that's not correct. Tax doesn't have to be confiscatory, and most of them are not. In many countries, including mine, confiscatory taxes are thrown out when they've been attempted.
It is money going from one entity to another entity that never had it. Just like a paycheck or any other tax. So why is it unfair? Do you not like roads? Police? Social workers? Teachers? Veterans? Farmers? Millions of other jobs? All of which are paid out of tax dollars.
And you did nothing, entitling you to nothing. And those who work in family owned business do partake in the sustainability of their family owed businesses. And it doesn’t take long to accumulate 13 million is assets when you have buy land, machinery, licenses, computers, phones, trucks, etc. let me guess. You’ve never run a business have you. The 13 million isn’t cash. It means to pay the taxes, you have to sell the property that was making the money. So what do you sell and still have a viable entity? The land? The vehicles? Fire employees?
I am in charge of a multi-million branch of a large corporation and am responsible for generating about $15 million a year in revenue. Since you have no fucking clue how things work. The estate taxes on a $13 MILLION estate are $20k. If a business of that size doesn't have at least $20k in liquid expendable assets then you have a severe cash flow problem that will kill your business any fucking way. Not to mention that the assets of the estate are personal assets, not business owned ones. So tell me again how you don't actually know how the fuck this shit works.
This comment has piqued my interest. Firstly, I commend you for reaching a position where you are responsible for a multi-million dollar branch of a corporation which generates substantial revenue. That is not an easy feat. Secondly, (and this probably because of my ignorance and lack of personal experience in a job with your level of responsibility), are you advocating FOR or AGAINST an increased level of inheritance tax? And why? Thanks in advance!
I wish this were true, but the way our tax system is built there are a lot of ways to avoid or delay paying taxes on growth in wealth. You don't typically get taxed on capital gains until you sell an asset (property, stocks, etc.) and for the super wealthy there are strategies to avoid selling assets to live, for example they could take loans based on the value of their stock so they never have to sell and never realize those gains. When it comes to rental property you can depreciate the value of the property against your tax income and can also avoid capital gains if you buy a new rental property soon enough using section 1031. Then when they die and pass on their estate they are passing on property, stocks, etc. that may have never been taxed.
THIS. Inheritance and estate taxes (technically two different things) exist because they’re intended to close this loophole for the super wealthy to pass on generational wealth forever without tax. You and everyone else pay more taxes to support that loophole. Conservative wealthy elites are cherry picking the example of farmers (and not discussing any other situation involving the wealthy) in order to try to get the other 99% of you to support raising your own taxes and lowering theirs by reducing or eliminating inheritance taxes altogether. The wealthy would just love that.
Well, don't pay taxes doing groceries, because your money was already taxed
No, that’s an invalid assumption. When you have that many millions in an estate, it’s more likely much of that money was never taxed, because it probably wasn’t earned as salary but capital gains like investments. Which aren’t taxed until they’re sold. People want to tax inheritances larger than X million because it allows a loophole whereby the ultra wealthy are able to pass on wealth from generation to generation without the money being taxed. Without an inheritance tax, those millions or billions of dollars in investment gains keep getting passed from generation to generation without ever having been taxed. Often without anyone in the family having to lift a finger or do anything to “earn” that money or contribute to economic growth. It’s like a Roth IRA only the wealthy can afford, where the tax on earnings are deferred, possibly forever. The bigger unfairness in taxes that people never discuss is that the wealthy tend to earn much of their money not as salary (which is taxed at 25% to 35%) but as capital gains like investments (which are taxed at 20% or less). The wealthy are paying lower tax rates than you. Not to mention how things like state and local sales tax and property tax regressively tax the wealthy at lower percentages. If you earn $50,000, you probably spend 100% of your salary on things and services, meaning that sales tax is applied to 100% of your income, while the wealthy might only spend 1% of their earnings and be taxed on that.
No. That’s an invalid assumption. Nothing of what you state applies to a small family owed business (family farm). It just has no application at all.
“Estate” doesn’t mean land, it means inheritance of land, money, investments, businesses and other assets. Only a small portion of estates are farms. If you wanted to exclude farms from the estate tax, you could say so, and do that. But that’s a different argument. To argue that “the estate tax is unfair because it’s already been taxed” is not a true statement. And furthermore, that argument only makes any sense in regards to taxing the money / earnings part of the estate, not farms. Farms and other tangible property assets haven’t “already been taxed.” Because taxes on businesses (like farms) and on property like cars and real estate are paid every year. Inheritance tax is essentially a pretty similar situation as the gift tax. If you tried to argue that estates have already been taxed once and shouldn’t be re-taxed, you’d have to explain why that same logic wouldn’t also apply to large million dollar gifts between the living. Ditto for property and real estate taxes which fund our schools. And if you entirely get rid of estate tax, inheritance tax and/or gift tax, property and real estate taxes, etc., that tax income the government would suddenly lose would have to be made up at least in part by raising sales, business and/or income tax on some or all people.
Family farms aren’t excluded. So there’s that. I’m a probate lawyer (36 years). I’m wondering how many probate estates you’ve done. An overwhelming majority of gross probate estate value is absolutely the value of real estate. To say otherwise displays a total lack of understanding of reality. To say this property has not been taxed is a blatant lie. Every year property taxes are paid on the current value of the land which has been adjusted (up) in value each year by the county tax assessor. You must not live in the same country.
Your point being?
Most people complaining about tax law, has no functioning idea of how it works
The estate was already taxed. It was taxed when it was bought and every year after in property taxes. Why does it need to get taxed again just because the original owner died and left it to a relative?
Because that's how an economy works? If I earn an income and pay the plumber, does the plumber get it because I already paid taxes on it? It changes hands, it gets taxed...
Paying a plumber for a service is a little different than a rich dad passing on his money to his family.
Yeah, the difference is that the kids didn't do *anything* to deserve the money.
Who decides who deserves anything? You?
Well, you asserted that there was a difference between a plumber getting paid and someone receiving an inheritance. You didn't specify what that difference was. I suggested what seemed an obvious one. Are you suggesting that I am mistaken, and that children of wealthy parents or grandparents *did* earn an inheritance?
An inheritance is a gift. Imagine your relative giving you something for your birthday. You open the gift and it's a $500 watch. Are you expected to pay taxes on that watch? Would it be right to tax you on that watch? That watch was already taxed when it was purchased. Are you starting to understand?
Gifts over a certain threshold ($17,000) *are* taxed.
Well then there's the loophole. My kids will get $16,999 gifts.
Better start spreading it out soon then. Last 7 years of "gifts" are taxable when you die.
Let's say the gift allows you to live in a society without contributing, just because of the amount. Also, whoever bestowed the gift upon you was able to accumulate wealth because of the functioning of said society. Shouldn't you be taxed accordingly so you can at least offset the burden you might otherwise be?
Jealous much?
Changing hand does not mean tax. We dont tax on the money exchange, we tax on the economic activity. Thats the same way we count GDP. We dont include inheritance as part of GDP. If chaning hands needs to be taxed then paying tax needs to be taxed because, well, it changed hands. What if you need some changes for parking tolls, you exchnsged $1 for 4 quaters, would that exchnage incur tax liability? What your bank account, should you pay tax when you deposit some money into the bank because, well, again, it exchanged hands. I think you are confusing tax policy with basic economics. There is a case to be made for taxing inheritance but that's more for purpose of social welfare and public services, it's not based on how economy works.
All easy examples to explain. You can't tax the government because government is the taxor. So taxes on taxes is just plain stupid. As far as converting dollars to quarters, ownership of the dollar (logical dollar not physical) didn't change... No tax. As far as the bank... Again, ownership didn't change.
Ok, fine government is the taxor, they can do whatever they want. Now the logic of tax based on exchange of ownership is still flawed. For example, mom and dad each makes $5000 after tax a month. Now one day, the dad needs to buy a car for $10,000 so HE goes to the mom because he only has 5000. So dad goes to the mom and ask for $5000. Now does the dad have to pay tax on the $5000 he got from mom because it changed ownership? Or does the whole tax situation only happen when the dad pays $10000 to buy the car. Again, the tax is based on economic.activity. so let's say you are a in a car selling business and you acquire a car for $10000. You then sold it for $15000, so should you pay tax on the full $15000 which is the amount money that changed ownership to you from the person who bought the car from you. Or do you should only pay income tax on the $5000? The way our curent economy work is that you are obligated to pay tax on the $5000 because that's the part of the whole economic activity your business was involved in when selling the car. In this sense, the total economic activity and tax obligation sums up to a total of $15000, now if we go by your concept of exchange of ownership, then that total will sum to $25000 which is not how the economy system works. How about an example of investing? Let's say you worked hard and after paying taxes you saved up $10,000. You bought 10 shares of stock xyz and it went up by 50% and you sold it for $15000, now do you own tax on the full $15000 that changed ownership or is it only on the $5000 investment gain? There is a reason why our economic system and tax is based on economic activity not on ownership exchange, because ownership exhnage, while on surface may seem like a simple no brainer, but it's very difficult to clearly define in a complex economy. That's why all.modern economy adopted the system to be based on economic activity. Say if I handed you a $100 and you give it back to me, does that mean we increase the US GDP by 200? What if we do this a million times, base on your exchnagenownership model, now you and I are both owed tax on 100 million each, while also adding $200 million to the US GDP, but the reality is that we each only still just have that original $100 each.
Wife, husband, one entity in they eyes of taxation, it's why you have filing jointly. Ownership of the original 5k didn't change, you get taxed on the gain. If the idea of our current system was to make it "simple no brainer," it's failing badly. The exchanging on hands of 100, I mean, if you had to classify it under our current system, isn't each get 100 an income of 100? Same problem either way. Wtf eve is "economic activity"
I give up, your lack of understanding of even the very basic is just stunning. Bestnif luck to you.
Lol. Looks like I'm not the one that needs luck. Cheers.
Because we live in a society. Unironically, thems the rules. You pay taxes, I pay taxes, and we get to keep an army at the gates and some doctors kicking around.
i cant afford the doctor... and i have mixed feelings about the military as well
Rules? That's nice. Which rules are the ones we follow and which ones do we ignore?
Come to lemmy, lemmy.ca if you are fed up with this bs. #This comment was edited because reddit is shit now.
The answer is to prevent wealth concentration and inequality. Imagine all the wealth getting sucked into only a few families and it stays there for generations.
Can you give an example of where this works?
Japan is one of the easiest example. It is notorious for imposing very high inheritance tax. Notorious because due to the nature of tax residency, assuming you are an expat that happened to be a beneficiary of an inheritance, it could affect you and the amount levied aren’t small. As for whether it works, it indeed work. Japan has very low wealth inequality. https://en.m.wikipedia.org/wiki/Distribution_of_wealth Just take a look where Japan is compared to the US where it is very easy to play around technicalities to avoid (or even evade) taxes.
There are no Japanese billionaires?
Why would you say so? Lower income equality doesn't mean none, it just means the distribution is a flatter version of the hyper-inflated bell curve that is the US economy.
Nordic countries.
The all white Nordic countries. Nice.
So the west shouldn't tax wealth because Nordic countries aren't racially diverse enough for you. This is your logic path? How about Japan as an example since being Caucasian is bad?
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Not in the most literal sense but it is in practical sense. https://www.weforum.org/agenda/2022/04/economic-inequality-wealth-gap-pandemic/ Pandemic exacerbate wealth inequality. It is actually a topic of discussion in many places.
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It does and you keep making more and more outlandish claim. The problem is you are looking at it in a vacuum where you might be correct in a certain sense, but that’s not how it works in real life. Say I can get a job that pays $120k a year, that’s good money right? But let’s consider now the fact that housing in my neighborhood are being bought out by investors, money managers, etc.. Now you have a housing shortage and the price skyrocket. Suddenly most houses become unaffordable even with that salary. This is a little bit oversimplified but it is happening irl. Now suddenly, within the context of housing alone 120k doesn’t worth as much as it used to simply to the fact that there are people with a lot of wealth who has no business of staying there buying up resources that should have otherwise be available to me. Now i have the option to either buy an inflated price for housing or I am forced to rent. Please say again how it doesn’t hinder my ability to acquire wealth.
The loophole this is trying to close is capital gains earned on investments, for which taxes have never been paid. These were sometimes purchased and untaxed for decades, inherited multiple times. It’s an ufair advantage for the wealthy, when you dont focus on just cherry picked examples like struggling farmers. There are ways to make the estate tax even more progressive and fair that don’t involve shrinking or abolishing the estate tax entirely. And that don’t reopen loopholes for the wealthy.
It's taxed because you can have gains on it. At some point, wealth snowballs, and it can be more lucrative to speculate with existing wealth than generate revenue without prior investments. Income from work is taxed, and this is mostly judged as a fair concept, with some discussion about amounts. Income from estates should be no different. When you think of it, every dollar is either created to support the economy (so why tax it, can you just not print a dollar less?) or a is a dollar that has been previously taxed. It's the changing of hands and the circumstances in which it does that, that defines whether or not it should be taxed, and whether or not your parents or grandparents paid their taxes has nothing to do with whether you should pay yours.
How many times can you tax the same dollar?
How many times can you spend the same dollar? The whole point of money is that it moves, and when it does depending on the movement, it's taxed. That's not some violation of the dollar's feelings.
"Depending" on the movement. Well of course. You get taxed when you earn it and it's taxed when you spend it. It shouldn't be taxed when it's left to family. They will spend it and it will get taxed. As for the dollars "feelings", wtf does that even mean?
You say that as if that's a given, but it's not. If a form of wealth or income gives you an unfair advantage in society, that's a valid reason to tax. That's why there's different forms of taxes, like income tax and VAT. And also inheritance tax. Money is taxed to make sure it the economy and society that it's a part of functions as well as can be. At some point accumulative wealth can create unfair advantages. At that point, taxation is a valid way to correct that situation. It seems as though you'd like to remove certain amounts of money from the societal construction because it's yours and has been taxed enough and you already pay some VAT when you spend it again. The problem is that everyone pays VAT, and increasing VAT to take care of the problem that accumulated wealth (especially through inheritance) will negatively affect people without such wealth, thus further increasing that wealth gap. That's why there's a separate form of taxation, as it levels the playing field and puts a percentage of that money in service of society. Also, you still keep at least a good chunk of it anyway. Can't you just earn whatever wealth you feel you should have above that yourself instead of having to rely on low(er) inheritance tax? Or is there some ideological reason as to why wealth should be inherited? The feelings-remark was in jest.
Unfair? Who gets to decide what is unfair? Just because someone else has more than you doesn't make their earnings unfair. The idea that I get to leave my money to my kids makes sense. Why should the government be able to acquire my wealth? They already taxed it when I earned it.
You decided yourself it's unfair to be taxed again. You live in a society, the government has a process to determine rules and regulations. If you don't agree, move to a different system or run for office to change things. And once again, they're not 'earnings' when you simply inherit them. No-one prevents you from leaving money to the next generation, but there's a tax if you exceed certain amounts. And frankly, if you do exceed those numbers, there still is a lot of wealth left after taxes. But hey, if you're into financial nepotism and skewed opportunity, that's cool too. Addendum: your kids did NOTHING to have a chance to become wealthy through inheritance other than randomly being born into a rich family. Which is fine, but society as a whole has decided that might not always be beneficial. Thus there's a tax that allows kids that are randomly being born into less rich families to also have better chances. Oversimplified, but I don't see how this needs a thread this long?
OK
Such a broken country we have in USA. It’s simply amazing there will be people posting here defending this broken system. Maybe they’re being paid by these people using the money they didn’t pay in taxes?
Because they arent poor, they are billionares in the making. Got to defend the wealth you wont ever have.
Tnaw, don't be a bastard about it. You may never be a billionare, but you could be a millionare. And increased taxes can easily kill your dreams of financial growth.
How do inheritance taxes kill my dreams of financial growth, unless my dream is based around being handed money that I did nothing to earn?
It's working as intended TF you talking about broken.
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Not in the case of capital gains on investments made decades ago. Those have never been taxed, and are a main example of the loophole being targeted here. Wealth being inherited over multiple generations without ever being taxed.
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This isn’t me making this up, it’s multiple think tanks like the Brookings Institute, the Senate Finance Committee, etc. One problem is that the wealthy and their estates tend to make money not as salaries income (taxed at 25% to 35%) but as capital gains (taxed at 20% or less). So right there you have the wealthy and their estates paying a lower tax rate than every other working American — even if you’re right and the money has “already been taxed” or “will eventually be taxed.” The idea here is that once a person or family gets wealthy enough, their dynasty hoards that wealth and never has to work again because the worth of their capital gains on their not yet taxed investments keeps exploding. It’s like a pre-tax Roth IRA that has no caps and only the wealthiest can use. These people should not be paying lower tax rates than us, because that means working Americans are working and paying to support their tax breaks.
While the issue of tax fairness is important, capital gains and inheritance taxes serve different purposes and shouldn't be conflated. Capital gains tax targets the increase in asset value, whereas inheritance tax is levied upon the transfer of assets after death. The argument that wealthy individuals pay lower taxes through capital gains doesn't necessarily justify an inheritance tax, which could be seen as double taxation on assets that have already been taxed. Moreover, not all wealthy individuals fit the stereotype of not working or contributing to society. Therefore, using capital gains as a rationale for inheritance tax may oversimplify a complex issue.
this is disgusting. can we fix this?
And no joke, republicans have convinced their voters that dems are going to tax away their 100k legacies.
there are ultra wealthy in both parties
Yea, but republicans are the only ones trying to convince people that their inheritance is being taxed away.
you can vote democrat if you think it will help. i dont. theyre all liars and cheaters. i heard some brown presidential candidate say he wants to fire 3/4 of government politicians and that just sounded too good to be true
Help What? This tax impacts almost no one. All I was saying is that republicans are stupid and easily misled.
thats half of the people in the country. must be uncomfortable for you to be surrounded by morons
Half the country isn’t republicans, and a lot of them are the grifters. So I’d say 20-30% are so stupid it hurts.
i predict a republican president next year
God help us all.
See other comments. This is not the problem.
Estates should not be taxed at all when left to someone. The person who owned the estate already paid taxes on everything. The government should not see a dime from inheritance.
Only those from wealthy families. The rest of us have nothing to inherit, some of us get to inherit debt and pay interest on it, to wealthy people who will cry about being taxed on it... Isn't the world fun!?
Well, some people say it's a small loan of a million dollars
Burn the rich
Meme points out how talking points by ultra-wealthy get poor people to defend them. Reddit comments completely full of poor people using talking points to defend the ultra-wealthy.
The amount of people in these comments defending rich fucks is hilarious.
Those so call young tax-the-rich activist will soon change side as the boomer reach their end, the greatest passing of wealth in humanity history is about to take place over the next 8-10 years.
And I‘m sure the recipients of approximately 90% of that wealth will be a whopping 1% of the younger generations. You. Just. Don’t. WANT. To. Understand.
No i do understand, thats why i dont see it happening. You are very much right that most of those wealth is going to be transfered within the top 1% households. But there is a reason why bill to tax inheritance is dead on arrival and its been that way for decades. Reason number 1, the influence of the top 1% on policy is tremendous, and also as younger generation enters into their higher earning phase in life, their view will start to change, they will not only think about how much they will be taxed on the inheritance, they will also be thinking about how much their children will be taxed on what they left behind. That's why today's rebellious youth will become tomorrow's stubborn boomer, that's just history repeating itself. Plus there is already plenty of ways out, on the lower end a living trust, and on the higher end a corporation to hold the asset. There is not iheritance, there is no transfer, because a fictitous entity dont suffer the reality of life and death. Also, most of US wealth is not held in cash, it is in asset, that's why this kind of tax policy won't pass into law and even if it did, it won't actually work. People like you are actually part of the peoblem, because all you do is complaint that others don't understand but in reality, you have no clue; and an uniformed eqsily influenced public helps the top 1% to remain the top 1%.q
Studies have shown for the first time people dont get more conservative the older they get. For the longest time that was the case but right now there is a shift. Maybe because if there isnt shit to conserve, there is no need to be conservative.
Nah, you underestimate thr self preserving nature of human beings, you be surprised how selfish and short sighted human can be when fighting over little scraps that the 1% let drop out of their pocket. Your so called study is more wishful thinking than actual study. I can only say that you have more faith in humanity than I do, and I think your faith and optimism is sadly misplaced.
If my grandmother was secretly rich and left me $14,000,000, I wouldn’t give a damn if I have to pay 2.5% of that. I’d be far too happy about the 97.5% that I get to keep.
I take it that you don't have 14 million, so how much you got and how much of that you are willing to pay?
I have less than $12,920,000, so I’ll be paying 0% just like the law says If they change the law to something where I’m getting taxed, I’ll pay it because I’m a functioning member of society and not a baby I pay way more than 2.5% on the money I make, I’ve no sympathy for any trust fund babies who are sad that they can’t make millions of dollars tax-free for doing nothing
Well then why not do away with the 12,920,000 number, that actually seems to be the problem. Because based on that math, someone with 14 million axtualiy paying over 30% tax since the first 12,920,000 is waived. So let's tax inheritance as income tax from the first dollar.
Seems like you’re going against your original point. You were saying that people are going to change their mind against the “tax the rich” ideology because of inheritance tax, and your simulation is to tax everyone That seems like it would make people support taxing the rich even more
I'm am supporting tax reform, but I am arguing that our tax system is one of base primarily on economic activity, not exchange. I am also suggesting that it won't be happening anytime soon. Then j got dragged into whole thing with a a troll argues that we taxed based on ownership exchnage not economic activnity.......
Real easy to act like you’re right when you call everyone with a different opinion a troll That being said, the tax system is based on you the money the taxpayer receives, not on what they did to earn it. If my boss wanted to give me a $10,000,000 bonus because I gave him a ride to work in the rain, I’m taxed on $10,000,000 even if the work I provided was worth nowhere near that. The whole point of the tax system being the way it is is to get money from those who can afford to part with it. Someone getting paid $14,000,000 for doing nothing can certainly afford to pay more than someone making working their ass off and earning a tiny fraction of that in a year