You mean;

More money for Paris Hilton = More jobs?

It's almost as if we're being asked to BRIBE the rich for our jobs.
Fuck.

If I had the money to bribe them with, then I wouldn't need a job. Where am I supposed to get that kind of money?

What?

Borrow it from Communist China?

Sounds like a capital idea!

It's funny how indexing for inflation is out of the question when it comes to something like the minimum wage, but turns out to be an essential safeguard when it comes to making sure that a $10 million exemption doesn't dwindle away to nothing due to future congressional inaction.

That's because all economists agree; like programmed zombies under control of some mad scientist with an orbital mind control laser, that the CPI understates inflation. And therefore, it's a valid measure for rich people, but it's pretty much irrelevant to poor people, who need to just learn to work harder, and buy less.

Here's what I don't understand. Where the fuck are the estate tax lawyers, accountants, life insurance agents, and financial advisors (of which I am one) on this issue? All of these professionals make a shit load of money using existing laws and loopholes to minimize estate taxes (or make sure that insurance proceeds will pay the taxes). The republican party is threatening to take away some of your most lucrative clients! Stand the fuck up already!

The estate tax repeal would only effect 94 small businesses, but a significantly larger number of large businessmen. Don't confuse the motivations stated by spokesmen with those actually driving the change in opinion.

drjimcooper,

Of course the lawyers, accountants, etc are against repeal but you can't expect them to be foolish enough to voice such an opinion. You don't score a lot of points by advocating public policy extremely adverse to the interests of your client. You sit quietly and pray that the vote for repeal fails.

UofAZGrad,

Good point. But these professionals wouldn't even have to voice their opinions. They could simply stop voting for republicans! I would think that people with the analytical skills necessary to handle complex T&E issues could figure out that whatever tax break they are getting via republican tax cuts will do them no good if their clients no longer need to pay them big bucks for their services.

It's the ultimate irony that progressive taxation creates the market for these specialized services, yet the providers of these services often vote for the party that would destroy this market.

let us talk about it realistically for a moment.

my mom died last year.

she had assets of approximately $2.4 million.

the state dunned her estate for something close to $500,000.

in a very real sense, she had been paying taxes on her holdings for years.

why should she have to pay the state for those holdings again just because she died?

just so you will know, i am an anti-statist. demtillians. reptillians. i hate the lot of them.

but i do want someones to explain to me why paying taxes for years on assets should still require a payment of taxes to the state upon the slipping of the mortal coil.

albertchampion,

Estate taxes are a way to discourage and penalize the idle rich from simply handing down assetts to lazier and lazier generations of useless children (see Hilton, Paris). It's also a way to promote meritocracy.

In point of fact, albertchampion, it is quite easy to avoid paying taxes on asset growth. Buy assets such as real estate, and never sell them. You might collect rent, but that doesn't tax the appreciation of the property. That only happens when the property changes hands, either via a sale, or via death.

Beyond that, there's another reason, which is land use policy.

With out an estate tax, property could and would stand under the same use for centuries. I can point to property in the heart of Silicon Valley that is still an orchard. It's pretty, but it doesn't make sense for it to be an orchard instead of houses or apartments or office buildings. It's there because Prop 13 meant that it could be held.

With no estate tax, that orchard might stay there for centuries, being used extremely inefficiently.

Craig: It's actually 94 "family owned businesses," which are the only ones that would be handed down to anyone in the first place. I glossed this as "small businesses," which I probably shouldn't have done. In fact, most of them are biggish businesses, such as car dealerships and grocery chains.

>With no estate tax, that orchard might stay there for centuries, being used extremely inefficiently.

That's enough for me. Death to the estate tax!

Oh wait, I'm not an american citizen. Damn.

well, dr jay, the orchard is what i would prefer persisting.

office buildings. apartments.

i prefer the orchards.

don't you?

Any amount of graverobbing is too much. It's a shame that the simple principle that we shouldn't be cackling in glee at the revune very time a senior citizen dies requires political compromise by the party that doesn't want to punish people for having the audocity to die..

Well if we can't tax an asset when it changes hands, I guess to be fair, the US should eliminate the sales tax. Right?

Why should you, or anyone, get $2.4 Million of unearned income? Why should a dead person get to decide what happens to things they cannot, by definition, use? Then there is also the fact that if one were paid $2.4 million, he would certainly pay much more than $500,000 in income taxes. You and yours were given quite a gift with such a generous tax break.

you know what i hate?

none of you fascist bastids said a word of condolence.

i am your enemy. forever.

Albertchampion,

Your mother is dead. Her days of paying are over. You are, in effect, paying the taxes on income earned because your mother died. Enjoy the $1.9 million. I wish I had such a complaint.

No offense, mom.

The United States should make China cover the full cost of the federal budget and not just part of it. That way we wouldn't have to pay any taxes which would make the general revenues increase exponentially.

Sorry for your loss, albertchampion.

If there was federal tax, that means your father has died too. Still, I don't believe your 9/11 conspiracy theories.

"i am your enemy. forever" albertchampion

Hello. My name is Inigo Montoya. You killed my father prepare to die.

Now, the fascist bastids are making fun of you, albertchampion!

this class envy fascinates me.

why do you think that the state deserves the right to appropriate any amount of a citizen's assets.

at any time in his/her life?

why do you think that the state has some claim on your wherewithal?

this is a nasty notion, i think.

because it also means that you think that the state has control over your life. that the state can send you to gitmo without cause. can incarcerate you without any explanation other than you are an "alleged" terrorist. or that you have "alleged" linkages to terrorism.

as i see it, once you walk down that slippery slope of state appropriation of citizen assets, then you adopt the notion of the state having total control of your life.

perhaps you relish that idea of fascism. i do not.

why do you?

AMERICAN HAWK: It's a shame that the simple principle that we shouldn't be cackling in glee at the revune very time a senior citizen dies requires political compromise by the party that doesn't want to punish people for having the audocity to die..

Been drinking much tonight, AH?

Been drinking much tonight, AH?

had LOTS of tequila and vodka (not together LOL).. more than i planned to. took cab home, will get car tomorrow. thought would check in on PA while sober up. Not working, as i have beer at home.

as usual kevin drum wants graverobbery and so do you libs. lol.

I do not know whether or not you believe in the afterlife, albertchampion. But in either case - pardon my language here, it's difficult to strike an acceptable tone - I find it hard to imagine that your mother was in any way pained or harmed by the government having taxed her estate. She is in a place where this question no longer affects her.

The real question regards her heirs. What did you, her heirs, do to deserve this $2.4 million? Why should you be entitled to millions of dollars which you did nothing to earn, while millions of poor children in the United States will suffer their entire lives, receiving substandard educations and health care, because they did not have the good luck to be born to parents who would leave them $2.4 million estates? And what of those who are born to estates worth 1 or 10 or 100 billion dollars? What did they do to deserve the fantastic power inherent in such wealth? Don't they have an obligation to return some of that wealth to the community which made their staggering prosperity possible?

I do not believe there should be a 100% inheritance tax, as was advocated by a great Jewish socialist politician from the Lower East Side in the 1920s. Parents have a natural desire to accumulate savings for their children; this gives them peace of mind during their lifetimes, and stimulates productivity and savings. But that interest has to be balanced against the interest in a fair society, where children start out with equal chances.

Anyway, governments have to tax SOMETHING. Inheritance is money passing from one person to another, just like a salary or a purchase is. Why is it more just to tax your wages, which you worked for, than your inheritance, which you didn't? The company that pays your salary makes its money from someone else, and taxes were "already" payed on that money when it came into the company. So why should taxes have to be paid again on "the same" money?

The answer is that this transaction represents the creation of wealth in society. We pay taxes to the government in exchange for its work in creating and maintaining a society in which we can generate (or inherit) wealth. Inheritance seems like one of the best possible points at which to pay that debt to government.

One final way to look at this: when someone dies, their money is presumably in a bank or some other investment. If I find out that the person is dead and not around to protect that money anymore, I could go to the bank and, using threats or bribes, induce a bank officer to give that money to me. What prevents me from doing this? The US government. (In countries with ineffective tax systems and corrupt governments, say Nigeria, estates often disappear.) So that's one way to look at what the estate tax is buying you.

Well if we can't tax an asset when it changes hands, I guess to be fair, the US should eliminate the sales tax. Right?

bad analogy. if a business is sold, then that should be taxed. however, what you leave in a will is a GIFT. the death tax is like taxing kids for getting toys on christmas. what did they do to earn it??? nothing, therefore the governsment should get a piece. or that's liberal logic anyayy.

inigo montoya.

you must tell me how i killed any members of you family.

i think that i did not.

the death tax is like taxing kids for getting toys on christmas. what did they do to earn it??? nothing, therefore the governsment should get a piece. or that's liberal logic anyayy.

If you give your kids a $2.4 million Christmas gift, you should have to pay a lot of tax on it. And, indeed, you would. It's called gift tax.

Idiot.

ALBERTCHAMPION: this class envy fascinates me.

why do you think that the state has some claim on your wherewithal?

this is a nasty notion, i think.

because it also means that you think that the state has control over your life. that the state can send you to gitmo without cause. can incarcerate you without any explanation other than you are an "alleged" terrorist. or that you have "alleged" linkages to terrorism.

as i see it, once you walk down that slippery slope of state appropriation of citizen assets, then you adopt the notion of the state having total control of your life.

perhaps you relish that idea of fascism. i do not.

oh,horseshit.

i created my mom's estate.

more to the point, the state has no relevance.

if we had lots of time, i could tell you about how the reptillian/demtillian state has gone after me and my family.

suffice it to say, philosophically, what right does the state have to extort assets at death?

and if you think that the state has that right, tell me why you think that.

what i want to learn is why so many think that the state has the right to put its hands in your pockets. all the time.

tell me why you think that the state has that right. because you must understand, if the state has that right to appropriate your assets, you have allowed it to appropriate YOU.

but i understand, the incarcerations at gitmo really don't upset you. depriving individuals of their livelihoods is OK. appropriating assets is also OK.

the amerikan progressive left. morally bankrupt.

American Hawk: I'm not in favor of graverobbing at all. I have no problem with anyone who wants to use their $2.4 million in savings to buy solid gold death masks of themselves and have it buried with them. What I have a problem with is people who want to give it to someone else without paying gift tax.

more to the point, the state has no relevance.

If you would be so kind as to sign a sworn statement renouncing any right to police or government protection, or to a suit or trial, then I would be happy to have the state forgo the tax on your mother's estate.

My next step would be to spend a little money to track down your IP address, then spend a little more to find out where your mother's estate is held, and finally show up with some guns and take it. That would feel to you like a tax rate of, oh, about 100%.

ALBERTCHAMPION: and if you think that the state has that right, tell me why you think that.

what i want to learn is why so many think that the state has the right to put its hands in your pockets. all the time.

tell me why you think that the state has that right.

While not as many times as you've asked it, your question has been answered more than once. The state is the reason your mother was safely able to create her fortune. She enjoyed its protection while she was alive. You enjoy it now that she's gone. Sure, it's hard for you, and we do sympathize with the great sacrifice you have to make by being left with so little. But why don't you see what you can do with your $2 million and quit complaining?

Or were you out drinking with AH tonight?

haha, no. less political people more PRETTY GIRLS.

you folks are demented.

my mom had the good fortune to own a property in an area that went crazy for dirt.

why should she be punished by the bushit irs for that?

but, clearly, there is another bit of bushit at this board.

2.4 ain't nothing. if you think it is something, then you haven't been paying attention.

2.4 in the scheme of things is chump change.

now, let us talk about what i do.

i manufacture things that make your world happen.

if i were to shut it down, you might make it for a few months.

and now, tell me, what do you do? do you make the world a better place? if so, tell me how.

by the way, as i said, i have paid all the taxes. so, respond with the understanding that i am free, white, and 21.

With all the irrelevant outrage attached to the estate tax (face it, if your precedent dies and pays some tax, that gurantees that they were richer than, what?, 98% of the nation that includes 99.9% of the poeple that protected their way of life in a visceral sense, you can't expect the rest of us to bleed for you, the inheritor.

On the other hand, the Alternative Mininum Tax was never indexed. The 1978 $100,000 break level could do with some adjustment. I fall below this but recognize the intent of the tax was not to tax upper middle-class but to reduce the heinous tax avoidance that continued even after this attempt. (Sorta like political campaign spending and its corrupting source.)

Anyway, wouldn't it have been better to lift the weight off the oppressed middle-class before giving another break to the super-rich?

Albertchampion:

"i created my mom's estate."

Oh? If you created your mom's estate, why was it in your mom's name? If you actually created it, i.e. you "earned" the money which created it, then isn't it your estate and why would you be taxed for it? I smell a rat here.

"tell me why you think that the state has that right. because you must understand, if the state has that right to appropriate your assets, you have allowed it to appropriate YOU."

Ridiculous. Hyperbole. Foolish ranting. If the state took 100% you might have a point.

"but i understand, the incarcerations at gitmo really don't upset you. depriving individuals of their livelihoods is OK. appropriating assets is also OK.

the amerikan progressive left. morally bankrupt."

Depriving people of their livelihoods? Again, ridiculous, hyperbole, foolish ranting. If you can't manage to get by on 1.9 million instead of 2.4 million, you certainly don't deserve it.

My father is 83 and I hope he has a number of more years to live, as long as he is reasonable healthy and mentally with the program, which he currently is. He is worth ca. 2 million now, which upon his death will be split between my 3 sibs and myself.

Were he to die this year, and if the estate were evaluated as being more than 2 million, my sibs and I would have to pay tax on that. So maybe we'd inherit 1.5 million. Split 4 ways, $375,000. Ya know, I think I could deal with that. But I'm not counting on it and it's not my money.

Did I or my sibs lift one finger to earn this money? No, and as a matter of fact, my dad inherited the majority of it. So unlike you, I'm willing for some of that money to go to taxes as my part of the social contract.

And as for Gitmo and we liberals being morally bankrupt, HOW DARE YOU? HOW DARE YOU? Who has established Gitmo? Who has held them without trial and is still resisting the latest rulings? Who has said that torture is ok in some circumstances? Who has said that the Geneva Conventions didn't apply?

Hint and DUH: Bush and the Republicans and conservatives!

Who has protested this? Hint: NOT the conservatives. No, we liberals and Democrats have been the ones protesting this!

You, sir, are an ignorant and selfish fellow. I pray that you will someday grow beyond that.

albertchampion --
you are clearly confused.

Your mother didn't aske to be buried with the full $2.5 million or equivalent in afterlife necessities. No. She left it to you.

So, clearly, there is no way in which she is being punished. She is blissfully unaware of your childish tantrum of wanting the whole deathday cake. Mine! Mine! MINE!

Let's see. Who has a monopoly on continuing life on this planet? My life will end in a few months.

Good God! This is either GW or Putin, with their finger on the button!! Or, maybe, some scientist with a flask of super-virulent plague.

That, or you are some chump who has no appreciation of other people's contributions to this world and an overblown selfimportance.

Mmmm. I ... wonder ... which?

Rape rooms!

ALBERTCHAMPION: why should she be punished by the bushit irs for that?

i manufacture things that make your world happen. if i were to shut it down, you might make it for a few months.

and now, tell me, what do you do? do you make the world a better place?

fascinating.

this idea that the state has the ownership of your life.

and that so many adopt that idea.

did you recognize that adolf had so many acolytes?

until tonight, i had no idea that so many were so demented.

trying to tell me that the state has the right to appropriate my family assets. and this from the purported progressive left.

sorry, assholes, but you have missed the big picture.

the state doesn't have that right.

"the state has the right to appropriate my family assets."

The state appropriates my family assets every freakin' day. Get it? My dear departed mom is not an argument, btw, for not paying taxes. LOL.

"my mom had the good fortune to own a property in an area that went crazy for dirt.

why should she be punished by the bushit irs for that?"

. . . . I'm not sure I understand, but are you saying that your mother essentially accumulated that fortune by luck (and the initial sum she paid for the property, if not inherited, and any good sense & foresight she used in choosing to purchase it)?

"because it also means that you think that the state has control over your life. "
Taxes have been around for quite a while, in a wide variety of governments. There's very little evidence to support that they tip the scale towards totalitarian dictatorship-ness.

"what i want to learn is why so many think that the state has the right to put its hands in your pockets. all the time."

There have been a number of responses to this, all roughly along the same lines. Perhaps you could explain why you find them unconvincing?

To echo something said above - I don't mean to be insensitive, but whatever your beliefs about what happens after death, I think it's hard to imagine that this issue is of great concern to anyone who has died, especially given that the nature of the estate tax means that surviving heirs will be provided for. Perhaps if the deceased was strongly opposed to the estate tax or taxation in general, it could be thought of as a violation of their principles?

It's hard not to see this either as an heir upset over receiving less than the full amount, or as a grieving son seizing upon this issue as a focus . . . . perhaps you could convince us otherwise?

"2.4 ain't nothing. if you think it is something, then you haven't been paying attention.

2.4 in the scheme of things is chump change."

Y'know, I remember back when you could get a movie ticket and some popcorn for less than $10, and now it's $250,000 . . .

But seriously - that's just absurd. I don't know what sort of lifestyle you lead, or what your aspirations are, but in the scheme of things, $2,400,000 is a heck of lot of money, more than almost anyone will see at one time, and more than a fair number of folks will make in a lifetime.

"I manufacture things that make your world happen.

if i were to shut it down, you might make it for a few months."

Care to specify?

And yes, my condolences for your loss. My own mother died over two decades ago. The pain of losing a loved one decreases over time, and fades into life's background, perhaps becoming a bittersweet thankfulness that in this all-too-mortal world, one at least was able to spend that much - but still, never enough - time with them, but I don't think it ever goes away entirely. And that's not a bad thing, exactly, since this is a sort of tribute to one's love for them. But so, of course, is living one's life.

Albert, if you are an anarchist, now is the time to come out and say so.

So Kevin, I think you've missed one part of this bill that might bring a whole bunch of businesses onboard - and screw workers a bunch too. What more does a plutocrat want? Here's what I wrote about this particular bill and why it's such a deal for the Repubs:

When I wrote about the minimum wage scam the Republican House pushed through this week, I hadn't understood the full depth of their scam. This is truly a poison-pill bill designed to force some of the progressive states (and cities who have passed living wage laws) to give tax cuts to employers who hire employees who also earn tips AND cap the earnings of those workers or to cause those workers to be completely excluded from those covered by minimum wage regulations. Here's a rundown of the bill:

• Seven states - Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington - do not allow employers to take a tax credit for the tips earned by workers to reach the minimum wage threshold.
• In these states, a worker is paid a minimum wage and the tips are then added to their earnings. Employee earnings = full minimum wage + tips. If the minimum wage is $7.50 per hour and the employee averages $2.00 per hour in tips, then the employee takes home $9.50 per hour. The employer is responsible for paying the full $7.50 (no credit).
• In states where this law is not in place (or only partially in place), the amount an employer pays can include a deduction for the tips of the employee to reach minimum wage. In this case, using the same numbers as above leads to the following: employee earnings = $5.50 + $2.00 = $7.50 or minimum wage. Employer takes a $2.00 per hour tip credit for each of his workers and employees are paid $2.00 less.

The really special thing about this bill is that it affects over 1 out of 5 million workers that earn tips in the US (data at my site). I bet that becomes a big enough payback to have the "business community" back this travesty, don't you think?

"Do you shovel hydrogen and helium into the sun producing the rays we all depend on for survial?"

Now that would be an interesting job - although probably paid at a rate too low for an increasing number of NYC apartments . . .

"fascinating.
this idea that the state has the ownership of your life.
and that so many adopt that idea.
did you recognize that adolf had so many acolytes?
until tonight, i had no idea that so many were so demented."

It's a poem!
Seriously, though: albertchampion - you know folks like Andrew Carnegie, Theodore Roosevelt, and FDR supported an estate tax, right? Do you think they were fascists? Do you think FDR was a disciple of Adolf Hitler?

Speaking of reasons: could you summarize the three or four main arguments, as you see them, that have been put forth on this thread in defense of the estate tax? I mean, certainly you're free to refuse, but I would be interesting in seeing this, especially if you'd point out whatever flaws you see in each.

"the state doesn't have that right."
Actually, that power is specifically granted to Congress in Article 1, Section 8 of the US Constitution:
"The Congress shall have power
to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States. . . ."
and the 16th Amendment
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
and 26 U.S.C. § 2001(a)
"(a) Imposition
A tax is hereby imposed on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States."
[Although note that it actually only applies to estates over a certain amount: this year, 2 million/4 million for couples, and that the tax is imposed on the amount over that exemption.]

Incidentally, the Inigo Montaya comment above is a reference to the movie The Princess Bride. More details upon request or googling.

So how exactly does this work for the family business?

A business worth $10M (approx $5M sales, $500k net)is owned by John Sr. In order to pass on the business "tax-free" to John Jr, Senior would have to put half the business directly under his wife's control. That's how the exemption gets "doubled" (hmm - what about divorce?) Then Senior's got to die at a convenient time and make provisions such that Mrs. Senior dies off as well. And since this happens at around age 79 for men and 82 for women, I guess Junior would have to take things on faith until he's 60 years old or so. But then he gets to run the outfit until he keels over in 20 years and John III takes over. Not a real winner of a succession plan.

Are you beginning to understand why small businesses don't tend to fall under estate taxation? That's nice. They do, however, come under the flip side of the system - the gift tax. As gift tax limits are still at $1M-$2M, the business would still be hit for a minimum of around $1M in tax unless Junior just happened to have that much laying around the house to send to the IRS (in cash). The real-world options for coming up with the cash and their effects on a $10M business are left as exercises for the reader. Oh, and you get to repeat the exercise each generation.

williak

Kevin,

My small businesses/large businessman joke was poorly phrased. My point is, the top business lobbyist is looking out for a lot of wealthy CEO's and such - running corporations unencumbered by any estate tax - who don't want to pay the tax on their personal holdings. He can't come out with the "Free the Incredibly Rich" line of reasoning, so he falls back on mom-and-pop business being cruelly dashed by a greedy goverment tact. You're right that businesses are in no danger from an exemption-raised estate tax.

Ninety. Four. The entire business community is practically giving itself whiplash making a U-turn on the hated minimum wage in order to reduce the estate tax on 94 businesses each year. Wow.

IOW, it's not at all about protecting small businesses, but about the preservation of personal wealth.

The WaPo headline read "An Estate Tax Twist Reverses Party Roles on Minimum Wage," but it really should have read, "A Minimum Wage Twist Leaves Party Roles on Estate Tax Unchanged."

albertchampion:

What you need to do is move to one of the countries where the state doesn't collect taxes from average citizens ("appropriate my family's assets", in your phrasing). These include Nigeria, where 80% of the state's budget comes from taxes on oil extraction, and Somalia, where the state essentially does not exist.

However, in both of these countries, you will find that a significant portion of your annual budget goes to hiring gunmen to protect your assets. You will also have to pay upwards of $10,000 per child per year in private school tuition in Nigeria (I don't think there are any decent schools, public or private, in Somalia). You will have to pay very large bribes for water, electricity and phone hookups, as well as buying a generator and fuel for the constant power outages, because the government and power companies are unable to protect power lines from siphoning. All of your health care costs will be out of pocket, because no health insurers will cover you; and you will have to fly yourself to Europe for all but the simplest procedures. And you will be much more likey to have serious health problems, esp. infectious diseases, because of ineffective government public health departments.

Oh - and you probably shouldn't keep your money in banks, because it might get stolen at any time due to ineffective government monitoring of the banking sector.

That's what a society where the state can't tax its citizens looks like. Enjoy.

albertchampion --
Thanks -- or not -- for refusing to answer any questions asked.

We'll take your lack of reply as a wake up to actual thought.

Or, on the other hand, we'll take your recent arrival and moving on as an immature mind that cannot handle any level of logical conjecture.

For gods' sake, remove foot from mouth before speaking!

My middle class FIL is convinced that the "Death Tax" affects him. See how stupid people are?

my mom died. boohoo, give me money.

williak. The smartest thing to do with your fictional business is just to have each generation hand the business over to the next before death. Then the transition is handled under a wholly different set of laws that are much more friendly to your fictional family. Preparation Prepvents Problems. Or if death happens suddenly, I imagine that the IRS usually works with the beneficiary to craft a payment plan.

Bent,

Perhaps you would be kind enough to explain to me in detail how you would go about the "family friendly hand over" of a $10M business to the next generation.

What you are PPPing about would fall under gift tax rules which have much tighter limits on exemption amounts than do those currently in place and proposed for estates. Furthermore, the inter vivos transfer of business interests driven by tax law very frequently works at cross purposes to the best interests of the business and the family members involved.

You obviously know little about these subjects as evidenced by your "imaginings". I would recommend you talk at length with a some people who have actually performed the complex planning gymnastics necessitated by what amounts to a high-stakes gamble at a game with no fixed rules.

You might not ever sympathize with the owners or heirs but you could at least gain an appreciation of the difficult decisions they are forced to make based on their best guesses at exactly how the distant future will unfold. Just keep in mind that any errors in guessing can cost millions, cause family rifts, ruin businesses and destroy livelihoods. Want to play with your family, your employees, your money?

williak

"Albert Champion" is a phony, yet another paid op or pimply college repub fronting on his computer. Look at the number of posts. Consider the name. Look at the language used in the 1:45AM post. This is not for real, just another lure. Why bite?

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Good stuff guys... make sure to always point out that if government doesn't recover X taxes from the dead Hiltons *all* the live working, uh, stiffs are gonna have to make up the difference.

If the estate tax ever was found to kill off any individual small business (no actual case studies are ever given, do you notice) those employees can get new jobs in this great economy of ours, and everybody STILL ALIVE will pay a little less tax.

I bet most family businesses go out of business due to the incompetence of the last generation, anyway. Hasn't Brookings or somebody done a study?

Anyway, did anybody notice that albertchampion said first that his mom paid a lot of taxes, then that he "created" his mother's estate, and finally let it slip that her wealth came from a place that "went crazy for dirt"...

I suspect that at a minimum roads and infrastructure, all paid for by taxes, enabled that bit of "dirt" mania, and maybe Ms. Champion kept the place nice but she did nothing different than Ms. Middle America in a small town watching the businesses shutter and the home buyers dry up.

Calling the estate tax a death tax is disingenuous. Let's face it, it is an inheritance tax, a tax on the windfall of money that the heirs get, not a tax on a dead person who is beyond caring whether he/she paid some taxes on the tax free accumulation of money from tax free bonds and other tax free assets that he/she cleverly made in order to avoid paying taxes while still alive.

So who is against windfall profit taxes? Isn't that what it is, the heirs profiting from the death of their progenitor? And why should they profit from this death? Did they plot to kill the golden goose? Did they labor mightly to contribute to his/her gray hair, heart attacks and fatal stroke? Does this work require more brains and greater rewards when you are rich than when you are poor?

Indeed, the heirs of a wealthy person have already benefitted mightly from that wealth (see Hilton, Paris). Why should they then be given free rein to what is left, in a ghoulish spectacle of money grubbing that rewards them for something that poor children do for free?

>"Albert Champion" is a phony

Actually I think he's the same guy who used to post at Eschaton a few years back, posts that were way too weird to be a phony. Delusional, maybe.

He has his own set of talking points completely perpendicular to any and all political parties I know of!

>Did they labor mightly to contribute to his/her gray hair, heart attacks and fatal stroke?

Ah, I see you have children.... :)

Albertchampion is a poser and a loser. Screw him and his phony mom. No big 21 year-old industrialist (if there are any) spends the wee morning hours crying into a blog. No, those young industrialists are working. Or getting some sleep for another hard day's work.

Ole Albertchampion is some loser hanging out in his dorm room, door shut, typing away at his computer. Never mind that most of his fellow students are studying, socializing, or partying. He has important work to do. Inventing an alternate life and persona takes a lot of work.

Albertchampion - lick my plate. You haven't worked a day in your life. Mommy and Daddy's checks keep you afloat. Go out and get a real job, then come tell us how it's going.

The 18 Uber rich billionaire families that have funded the big anti-estate push that started a decade ago must really think its funny that middle class conservatives are doing the dirty work for them even though the middle class has absolutely nothing to gain from being against the estate tax.

fascinating.

this idea that the state has the ownership of your life.

It's not your life, albertchampion, it's a percentage of your inherited money.

You've got some nerve to bleat about the immorality of other people when you conflate money with life. Money helps, but brother, if you are caused that much pain by losing a small percentage of what is (from my perspective) a fortune, you should try being born to alcholic parents who don't leave you anything but debts to be paid.

God, what kind of brat do you have to be to whine over only getting "only" $2 million.

Count your blessings, you rich bastard.

Actually something has to be done about the Federal Estate Tax. As things now stand it will go away for a year in 2010 and will return in 2011 at the million dollar level. At that level many normal middle class families would face the estate tax. The howls for making the repeal will be loud and long.

I haven't read the proposed law, but I understand that it doesn't include a complete repeal of the tax, simply a raise in the exemption to 10 million by 2015, with indexing thereafter.

I tell you what, if they allowed for an increase in the minimum wage, took out the language that prohibits states from passing their own higher minimum wage and indexed future minimumm wage increases, I think most of us could live with the deal.

my mom died last year. she had assets of approximately $2.4 million. the state dunned her estate for something close to $500,000. in a very real sense, she had been paying taxes on her holdings for years. why should she have to pay the state for those holdings again just because she died?

"She" is not paying any taxes -- because she's deceased. The estate -- that is, you -- is paying the tax, and you're paying the tax because otherwise you'd receive $2.4 million of unearned income free and clear, which we as a society have chosen to discourage in order to prevent the accumulation of vast unearned wealth. The estate -- that is, you -- has never paid taxes on those earnings yet, and therefore the estate -- again, not your mother --- is paying taxes only on earnings it is now for the first time receiving.

"Repeal the estate tax and within a few decades control over America's productive assets will be in the hands of non-productive Americans who never lifted a finger in their lives except to speed-dial their financial advisors." - Robert B. Reich: 'Estate tax pyramid scheme'

There is another reason the business community is supporting this bill. It would pre-empt at least some state minimum wage laws, preventing states from mandating higher minimum wage levels than the feds. This would be a big win for business similar to Congress' pre-emption of state interest rate caps on credit card and other consumer debt. It's much easier and more effective to lobby Congress than 50 state legislatures.

So who is against windfall profit taxes? People who expect to reap the windfall profit affected; this includes both people with a rational expectation that they will, and the kind of people that see buying a ticket for every lottery draw as an investment strategy.

You know why don't we bring some honesty to country.
Stop calling America a Republic.
Call it what it is: an Oligarchy.

The United Oligarchies of America.

the state dunned her estate for something close to $500,000.

What were the federal taxes ?

What state taxed the estate ?

OT

OK, so I caved and paid the NYT for 'Select'. I did it to read, not the 'big gun' columnist such as Paul Krugman or Frank Rich whom I could easily find at Technorati for free but for Joe Nocera and Gretchen M. Having done this terrible thing, I now find I'm actually reading the likes of David Brooks in a perverse need to feel I'm getting my money's worth.

I don't want to sound like Ann Coulter in any regard whatsoever but reading his editorial today made me want to advocate the return of the public stocks. I'd gladly pay a subscription to pelt this unspeakable asshole with a carefully chosen over-ripe tomato or something.

Arrrghhh!

OK, so I caved and paid the NYT for 'Select'.

Why, CFShep? Why?

why do you think that the state deserves the right to appropriate any amount of a citizen's assets.

Man, I just love me some anti-tax whackos (with special props to AH for taking the usual "taxation is theft" nonsense to the next level with his/her/its "graverobbing" claptrap).

Just offhand, I'd say political philosophy dataing back at least to Thoman Hobbes' Leviathan (if not the Bible), not to mention the US Constitution.

Next question?

trying to tell me that the state has the right to appropriate my family assets.

Nope. Governments don't have rights, they have powers. Legitimate powers are those granted to them by the consent of the governed; in the case of the US federal government, that includes the power to tax income from whatever source derived. Including when its derived by some person (family member or not) dying.

Anyhow, I can't imagine any reasonable basis for a claiming dead people have a natural right to own or dispose of property, so I'd argue the best view is that the ability to pass any property by will is a privilege granted by organized society (i.e., the state) because of its social utility, which it can and ought to limit as best will serve that utility.

"Thank God America's future heirs to great fortunes are being protected from the ravages of inflation by today's Republican Party."

There will be a special place in hell for all these supposed "moral" Republicans, constantly proclaiming their "Christinaity" while going for schemes like this.

Ron,

You deal with this stuff all the time, don't you? Would you kindly put it on the record that small businesses rarely get hit with estate taxation since things don't work very well when the heir-to-be has to run the business for years while an absentee, possibly addled, oldster still owns it. Furthermore, if the business is a flow-through (LLC, S-Corp, etc.), the profits flow to the current owner of record, not the owner-to-be (one of these days, maybe). Only in the case where the founder is unable or unwilling to face up to his death and its consequences does estate taxation of small business come into play - almost always a disaster scenario.

Given the above, small businesses live and die according to gift tax rules. With very small exemptions, these rules severely restrict straightforward and timely transfer of small business ownership from one generation to the next. Instead, complex dodges such as family limited partnerships, various insurance trust vehicles and complex buy-out/earn-out programs are required to minimize transfer taxation that can be ruinous to the source of family funds - the small business. All the consulting fees to lawyers, accountants, insurance brokers and the like are taken from the business, reducing the amount available for additional investment in machinery and equipment, employee benefits, diversification, marketing, etc. In other words, all the things that would otherwise serve to keep the business viable and ensure the livelihoods of all its employees (including the owners).

Also, there is endless argument (ie. dueling consultants) and often litigation over the discounted business valuations used in the various schemes in a desperate attempt to reduce the tax bill. I believe abolishment of gift/estate taxation replaced with a carryover basis scheme would be much more efficient, effective and fair to all concerned. Bad news for lawyers and CPAs - good news for workers, investors and even the tax man.

williak

you're a douchebag, albertchampion

the way you write everything like poetry on the back of an 8th grade girl's notebook points toward your self-obsession

the way you demand attention

the way you chastise complete internet strangers for telling you something you didn't ask them to tell you

as if you're so important we should know it's rude to not offer our condolences to some asshole in comments who's bitching about the estate tax in a post devoted to the estate tax

the way you don't engage any actual ideas but just lay out aphorisms as if they were white papers

the way you demand others submit a thesis to explain their position while you can't do better than a creepy haiku

you seem about 12 years old

you never even explaind how your mother paid taxes on her assets, i think you're full of shit

you're a stupid douchebag

i hate you forever for not telling me my hair looks great, asshole

The Estate Tax is the reason why Kerry lost. Americans don't want their earnings taken away from their children and the sooner the dems realize it and move on the better for them. And, of course, Kerry was a draft-dodging prick who hated the military.

Oh, I just read how albertchampion is 21. That's why you're a douche albert, you're 21 and an idiot, like many 21 year olds, but you don't know it because, well, you're a 21 year old stupid douchebag. The inflated sense of self, the self-obsession, the persecution complex, it's all pretty standard 18-24 stupid douchebag stuff. We've all been there.

You should read a book sometime instead of continuing to be stupid enough to equate taxation with fascism. Oh, and that shirt you have with Grover Norquist as Che? Get rid of it, you're embarassing yourself.

albert's age changes depending on his mood:

http://www.washingtonmonthly.com/mt/mt-comments.cgi?entry_id=8507

http://www.washingtonmonthly.com/mt/mt-comments.cgi?entry_id=8501

http://www.washingtonmonthly.com/mt/mt-comments.cgi?entry_id=6505

"Every closely held business in America that pays my salary as a top lobbiest..." :)

OK, so I caved and paid the NYT for 'Select'.

Why, CFShep? Why?
Posted by: Stefan

Hanging head in shame. But reading Joe Nocera anyway.

I got the nicest e-mail from him when he was solicting input about business related fiction...

Blushing.

My grandfather started his own business, which grew to abundance over the course of his life. When he saw his end approaching, he divided his assets among his grandchildren in the form of stock gifts. "Death tax" avoided, and for a brief time, he got to enjoy knowing what we all planned to do with our inheritance. Smart guy, for a Republican.

Everyone make fun of Albert in haiku whenever he comments from now on. He deserves no less than to be mocked.

old creep, man alone
Albert masturbates in dark
bothers nice people

why do you think that the state has some claim on your wherewithal?

Because the state paid to educate me, and the state pays to builds the roads I use to get to and from work, and the state pays welfare to poor people, so I don't have to trip over their starved corpses when I walk down the sidewalk, and the state pays for a military that keeps me and my way of life secure, and the state pays for police to protect my property, and the state pays for inspectors to ensure that when I buy food, it is safe, and the state pays for emergency disaster relief services in case there is an earthquake or landslide or wildfire, and my home is destroyed, I have a way to get temporary shelter and food for my family until I can get back on my feet.

Government's a good thing. I fund it happily, when they spend my money wisely. Those who spend my money foolishly (ie. Iraq/Halliburton), to the point where our National Security and credibility are threatened, are comitting treason, and should be hanged by the neck until dead. Period. But that's just my opinion.

The state also protects the right to property (with some caveats), protects the right to works, ideas, things, enforces contracts, builds and maintains electrical and transmission lines of all sorts, water, sewer, maintains the integrity of the markets, does a lousy job of it under republican leadership but nevertheless maintains and protects the quality of our land, sea and air. Etc., etc., etc..

All libertarians and Alberts and Norquist type Republicans should move to Afghanistan. It's a government free utopia there.

Incidentally, I'd be all for eliminating the separate estate and gift taxes if they were replaced by making all such transfers taxable as normal income for the recipient, with a reasonable annual amount (again, by recipient) exempt from taxation, if that was practical. But it seems to me that, while more fair, its more difficult for all involved (not so much for the transfers by will, but particularly for gifts.)

This absolute proof that Republican Congresspeople are PIGS. Damn them, every one of them.

That was a really beautiful post. Pull that one off to the side for your files.

"incidentally, I'd be all for eliminating the separate estate and gift taxes if they were replaced by making all such transfers taxable as normal income for the recipient," cmd

With ya all the way. But we've also got to modify the inducements which force society as a whole to subsidise bad investments (the unlimited ability to offset losses against income backwards and forwards which drive virtually all the abusive tax shelters) embedded in the tax code.

Income is income from whatever source derived. Period.

The Estate Tax is the reason why Kerry lost. Americans don't want their earnings taken away from their children and the sooner the dems realize it and move on the better for them. And, of course, Kerry was a draft-dodging prick who hated the military.
Posted by: Latallortaton on August 3, 2006 at 12:20 PM | PERMALINK

Okay, people, I'm only going to say this once. This is what is known in the business as a "parody." Some of you will be tempted to let the bile fly at this person who is "not a troll at all" (get it?). But please resist the urge. This is a "parody." That means it isn't serious. Got it?

We're right there, Alek.

But we've also got to modify the inducements which force society as a whole to subsidise bad investments (the unlimited ability to offset losses against income backwards and forwards which drive virtually all the abusive tax shelters) embedded in the tax code.

While I think some shifting of both gains and losses is desirable (I'd rather, for instance, tax long-term capital gains as normal income but let people recognize income for tax purposes in advance of realizing it—in fact, as a general rule, I might go so far as to say you can recognize income in advance, and defer losses with some fixed limit, but not the other way around except, perhaps, for income through inheritance if that was drawn into the normal income tax system, which might be recognized over a period of several years with some reasonable limit), I think you are quite correct that the current rules are too prone to being gamed.

I think you are quite correct that the current rules are too prone to being gamed.
Posted by: cmdicely

Just so.

And recall that I'm a former fiduciary tax trust officer (BS cum laude in Accounting AND BusAdmin in 3 years). I know where the 'bodies' are buried.

Albert you fail to realize that without the state I would just kill you and take your money. You pay taxes to prevent this from happening.

don't bother to post your grades in the comments unless you were summa cum laude

abolishment of gift/estate taxation replaced with a carryover basis scheme

williak, what is a carryover basis scheme? For us financially uninitiated.

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bf,

There are generally three ways to treat asset transfers at death. Two of them involve valuing the asset at fair market value (FMV) at the time of death.

The existing estate tax system adds an asset's FMV to the overall estate valuation on which tax is figured. After the tax is assessed, the asset's basis (or cost) is "stepped-up" to this new FMV. Should the heir choose to sell the asset at some time in the future, the gain would be figured as the difference between the FMV at the time of sale and the stepped-up basis assigned at the time of asset transfer from estate to heir. This is known as a basis step-up scheme. The government gets its whack at the highest value of the entire estate while the heirs get assets with their bases reset to FMV. Thus, should the heir want or need to immediately sell a transferred asset, there should be little or no gain. As a final painkiller, the asset is treated as having been held for the period that qualifies any gain as long-term no matter when the asset is sold. Whew!

The Canadian system operates similarly to ours with a slight but significant difference. At death, all assets go through a "deemed disposition" process whereby they are "sold" and immediately "repurchased" at FMV. This virtual transaction generates a series of gains (and losses) of differing terms depending on how long the various assets were held. The taxman totals up short-, intermediate- and long-term gains, nets them out and tax is figured. Yet again basis is "stepped-up" to FMV for the heirs. Even so, most Canadians maintain they have no estate taxation - quack, quack.

The third method is a tax-free transfer of the asset from the estate to the heir with no consideration of FMV. However, the asset does not receive a stepped-up basis but is held by the heir at the donor's basis (ie. basis, not value, at time of transfer). Therefore, if and when the heir (or his (or his)) eventually sells the asset, the gain will be figured on the difference between FMV at the time of sale and orginal basis as established by the original purchaser of the asset. This scheme is known as carryover or donor basis. This is an appropriate system to utilize when repeal of estate taxation is contemplated. The holder(s) of the assets are themselves responsible for the timing of the tax liability incurred respecting the sale of the asset rather than an unknowable external event. I believe it would probably be necessary for estates to declare and report asset bases and even FMVs for gain tracking purposes. Otherwise, the government and heirs would get into fights regarding true basis of mulitgenerational assets.

Hope that helps.

williak

i am not going to indulge in any ad hominem attacks.

i am going to write this as if you can become educated.

firstly, my mom was born in 1913.

to the best of my recollection she was the first female valedictorian at her college in 1934.

she was a school teacher for most of her life.

many of you missed my point...so i shall reiterate it.

for decades she paid her taxes. to all jurisdictions. still, she saved after taxes.

now, upon her death, the state says, WE WANT SOME MORE.

for what purpose? killing more iraqi non-combatants? funneling more arms to israel so that it can kill more palestinians, more lebanese?

financing more generals' retirements? more politicians' health care?

now, i want to go further, here. some ignorant individual thinks me to be 21.

i wish. i am 60. took care of my mom for the last decade of her life as she devolved from dementia. i figure that the last decade of her life cost about a $1,000,000. out of my pocket and hers.

here is where i come from. too many of you are content to spend your tax dollars to kill iraqi non-combatants. and now, lebanese non-combatants.

shame on you. i beseech you to think about caring for your own.

it is a great jest, for you, i guess, to punish my family some more. after spending a million for her care over the last decade, you think it sporting to extract some more assets from her savings.

never forget this, what is in her estate are her savings after all levels of taxation.

and what i want to learn is why you folks think that the state is entitled to that.

envy is what i think. a female schoolteacher who saved. after taxes.

and you think that the state deserves yet another bite.

shame on you.

Your mom must have been one stupid lady, albertchampion. Why she left a dumbass like you in her will is beyond me.

That poor whore worked hard all of her life and now that hard-earned money is in the hands of a first-class loser.

I see in the fine print here that the Republican legislation would increase the size of the estate tax exemption to $10 million per couple by 2015 and then index it to inflation thereafter. It's funny how indexing for inflation is out of the question when it comes to something like the minimum wage, but turns out to be an essential safeguard when it comes to making sure that a $10 million estate tax exemption doesn't dwindle away to nothing due to future congressional inaction.

Thank you! http://www.discount-cigarettes-shop.com/ Discount cigarettes

Albert speaks slowly
So we will get it correct
I think he’s just dumb

Albert is sixty
But he said he was twenty-one
He won’t last much more

don't bother to post your grades in the comments unless you were summa cum laude
Posted by: latin honors

Missed Magna by 1/100th of a grade point.

And this was before universal grade inflation.

And depite an accounting professor who refused to give anyone an A because it would have meant giving me (the only woman) one. He was known to stand up and - in the middle of a lecture - declare that women were fit only to become bookeepers.

You could say it was a hostile environment.

The two rigged B's this cat gave me kinda took the edge off my GPA.

Got my Phi Beta invite three months after I graduated, which still pisses me off although I somewhat regret turning it into confetti.

My tax paves the road.
All of Albert's taxes go
Straight into Iraq.

My ad hominem:
Albert is deaf in both ears
He is also blind
Even on the internet
He can't perceive the answers

actually, she didn't leave me anything.

i am just the executor.

what she wanted to do was to leave her library to libraries, and her money to fund the acquisition of books[mostly anti-fascist, anti-statist].

and executing her bequest has been very educational. libraries don't want her collection of anti-fascist literature. neither do they want her funds to create a collection of anti-fascist, anti-statist, anti-war literature.

it is so sad that the purported "left" has become populated by such idiots. you must be managing those libraries.

most interestingly, why is it that none of you can discuss tax policies. can only indulge in ad hominen attacks. are you all the spawn of bill o'reilly, rush limbo?

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