<p>IMO the inheritance tax should be 0%. Income taxes were already paid on that income and shouldn’t need to be paid again. If I’d rather leave some money to my kids rather than buy an expensive boat I should have that option since I’ve already earned the income and paid taxes on it.</p>
<p>omigosh, mini’s converting from Judaism to Islam. That’s what our now-vanished religion thread did to him.;)</p>
<p>How is inheritance tax different from a gift tax? With a gift tax, the gift is made with post-tax dollars; only $10 per person is non-taxable. One could devise an inheritance tax that would be similarly post-tax and shield a certain amount from taxes. </p>
<p>
</p>
<p>Indeed, but the recipient of that inheritance has not “earned it” nor paid taxes on it.</p>
<p>“IMO the inheritance tax should be 0%. Income taxes were already paid on that income and shouldn’t need to be paid again. If I’d rather leave some money to my kids rather than buy an expensive boat I should have that option since I’ve already earned the income and paid taxes on it.”</p>
<p>This may be true in your case but in many cases this isn’t true. Most of Bill Gates wealth, for example, has never been taxed. There are plenty of people sitting on gains in stocks, and real estate that have never been taxed.</p>
<p>Edwards really doesn’t have a chance. I don’t think there was one post in this thread that even mentioned him.</p>
<p>
I think when one passes away their related heirs should be permitted to inherit the money/estate value without paying further taxes on it. JMO.</p>
<p>One very liberal friend of mine and I would discuss this topic. He took the stance that since the person inheriting the money didn’t ‘earn’ the money the tax should be 100% so that all of the money goes to the government and none to the family member. Funny though - when his mother in law passed away leaving quite a sum to his wife followed by his wife passing away and the money going to him he seemed to have changed his mind about the 100% tax (or any tax) idea.</p>
<p>
But, when the stocks are sold, the inheritor, in the stead of the person who passed away, will pay the taxes. The net to the government would be the same as it would have been had the original person sold the stock.</p>
<p>Real estate taxes - I’m not sure what you mean by this. How are RE taxes not already being paid?</p>
<p>“One very liberal friend of mine and I would discuss this topic. He took the stance that since the person inheriting the money didn’t ‘earn’ the money the tax should be 100% so that all of the money goes to the government and none to the family member. Funny though - when his mother in law passed away leaving quite a sum to his wife followed by his wife passing away and the money going to him he seemed to have changed his mind about the 100% tax (or any tax) idea.”</p>
<p>I can see that happening. :)</p>
<p>Edwards’ proposal doesn’t tax estates unless the estates are over $4 million.</p>
<p>“But, when the stocks are sold, the inheritor, in the stead of the person who passed away, will pay the taxes. The net to the government would be the same as it would have been had the original person sold the stock.”</p>
<p>No it isn’t. The new basis is set at the time of death. If I buy a stock at $1 and it goes to $10 and then I die, the person who inherits the stock is now considered to have paid $10 for the stock. The $9 gain is never taxed. </p>
<p>“Real estate taxes - I’m not sure what you mean by this. How are RE taxes not already being paid?”</p>
<p>RE property taxes are being paid but capital gains taxes are not necessarily being paid. The same thing happens in re as in the above example of stocks with a bonus in re. You get to depreciate the re and get a tax deduction. Not only may capital gains taxes never be paid, but tax deductions may have occured over the years.</p>
<p>So now maybe you have changed your mind? It’s ok if you haven’t. :)</p>
<p>
Well, I guess I need to think about what you said. On the surface I have no problem with the basis being inherited as well so the $1 remains a $1 until the stocks are actually sold. </p>
<p>Basically, I think the inheritance should go to the inheritor as if the benefactor still owned the items.</p>
<p>For RE, taxes are already being paid but if a property was being depreciated by the benefactor and later sold by the inheritor I think the inheritor should have the same liability the benefactor would have had.</p>
<p>But, neither of the above is really what inheritance and estate tax is really about. What about the case where one had cash from income where income tax had already been paid? If that cash flows to the person’s kid do you think the kid should be liable for paying income taxes again on that money since they didn’t ‘earn’ it directly themselves? Do you think it should be a 100% tax since ‘why should they inherit anything if they didn’t earn it’ (my friend’s argument)?</p>
<p>I don’t think it should be a 100% tax. I don’t think it should be a 55% tax like it used to be (after the first 600,000 was tax free).</p>
<p>I think 4 million tax free is fair and as what the tax rate should be, I don’t know maybe the same as the capital gains tax rate. </p>
<p>I’m not like mini here. 
I hope that 4 million goes up over time too. :)</p>
<p>I would like unrealized capital gains to be taxed at some point. Your question about wealth that is being passed on and has already been taxed is trickier.
The way I look at it is the government needs the money. The people who inherit the money never made the money. So they get the money tax free up to 4 million and then pay the capital gains tax rate on the rest. It’s a small price to pay to keep the country going. ( I don’t know what Edwards’ tax rate is on this. It is probably higher than I would like).</p>
<p>If we were to tax the rich at a much-higher-than-current rate, would that translate into a lessening of the tax burden on the working classes, and funding of much needed government programs, or would it just result in ever more egregious government waste? I suspect the latter. Just because the government has the money, doesn’t mean it will use it wisely. Modern history has demonstrated quite the opposite.</p>
<p>World News Tonight recently ran an end-of-broadcast segment on the waste of ice shipments, initially meant to aid Katrina victims. Like countless other stories of this type, the government ineptitude was staggering. In the end, the entire supply was allowed to melt, after having been shipped and stored, and reshipped and re-stored, and finally declared “unsafe”—to the tune of hundreds of millions of dollars. I was sick with disgust. But not nearly so queasy as when I think about the hemorrhage of tax dollars that daily go toward funding the fiasco in Iraq, and how little our government deems necessary to protect our troops, or rehabilitate those who have been injured.</p>
<p>Don’t worry. We’re not taxing people to pay for the war in Iraq. We are borrowing the money so that future generations will have to pay the tab.</p>
<p>And how are future generations to repay the tab but through higher taxes? Or heaven forbid—greater borrowing. Doesn’t China already hold the mortgage on the farm at this point? It’s really quite scary when you think about it.</p>
<p>I really don’t care who pays your mortgage or to whom. Thisoldman doesn’t have a mortgage. Medicare is broke. W said it was broke 2 ago when he had his election mandate (#3 of his wolf, wolf alarms) and I believed him just like I believe him on his first wolf alarm and his second wolf alarm. Just let me know if Donkey says something outrageous or the Elephant breaks wind.</p>