OT WSJ -- Does the estate tax hurt farmers and family businesses?

I guess it all depends on if you are getting death tax personally or not. T= hen it is a big deal! Many ranches in the West have been inherited for two = or more generations. Now, because of continuing inflation, the ranch is wor= th many millions in current dollars. Nothing on the ranch has changed. Only= inflation. So, now the Government wants to charge the estate for the infla= tion the Government has created. There is no money available to pay the inf= lation/death tax, so the ranch has to be sold with short notice for what th= e family can get for it.

People should really stop with the "inheritance tax" and "death tax" and st= art calling it what it really is, "inflation tax".

Paul

All that wealth has been taxed already. The nose in the tent will expand to 100% death tax in short order if some have their way. It's simple wealth redistribution from the productive to the unproductive.

If our fearless leaders are going to continue spending money

it is a big deal! > Many ranches in the West have been inherited for two or more generations.

Oh? How many? Do you have addresses? We already know that it's a small amount compared to the number of large estates held as publicly traded stock. So what overwhelmingly big number makes it "many".

So they started out rich, and they still are. But because of inflation "rich" has some more zeros after the significant digits.

Ahh. And government is the only driver for inflation. So, how much benefit have these ranches accrued over the years from government -- if "nothing has changed", then that has to be in part because government has kept those ranches from being taken over by land pirates, or the Japanise -- you value that service at absolutely nil?

Then the family is the victim of its own piss-poor planning. If you're alive then you're going to die, and if you're living somewhere that has estate taxes then you should certainly plan on it.

Call it the "I want everything for nothing tax" and you'll cover just about any tax that an anti-tax boomer refers to.

In general Estate Taxes can be avoided in a number of ways. So the Estate Tax is really more of a good deal for financial planners and insurance agents. The question is " Should the government help accountants? " And if so why? Million of dollars go for evading the Estate Tax. Surely it would be better to encourage people to do something productive with the money instead of paying for estate planning and tax advice.

You can call it the " I want everything for nothing tax " or call it " The government wants more money tax ".

Some of the states are pretty bad about estate taxes. My brother in law died this year. He was a Virginia citizen and owned property in Virginia. Unfortunately he also owned a summer place in New York State. So my sister had to pay estate tax to New York on the property in New York. No surprise there. But she also had to pay estate tax to New York on the property in Virginia. I call that the"New York State wants your money tax".

=20 Dan

Dan, what you say is true only for medium size estates (millions). Lots of money can be gifted (26k per year for married couple per child and grandchild), put in life insurance, etc.

Say, 26k per year given to two children and four grandchildren, over

20 years, amounts to 26,000*6*20=3,120,000. Not bad. To add to this cash gifts, appliances and other hanky panky, which must be declared above 26k, but hard to prove, and a few extra mils can be passed along.

But that is "lots" by our standards. For larger estates, as far as I know, there is no easy or legal way to avoid estate tax.

So, essentially, small to medium sized estates can usually avoid much of the taxation. Estate tax applies mostly to the "big guys".

I agree with you here.

i

Any inheritance IS redistribution of wealth, from parents to children. If both parents and children are productive persons, then inheritance is distributing wealth from productive persons to prductive. If the children are not productive, then inheritance means distributing wealth from productive to unproductive.

Productive is a big word, too. I am productive when it comes to computer programming. If, hypothetically, my parents owned a large farm, then I would not be a productive owner of said farm. If I did not sell it, the hypothetical farm would probably decline.

On balance, based on my economics education, I think that auctioning off a part of an estate to the highest bidder, leads to more productive use of the property than passing wholly to children, who are essentially random persons (winners of the ovarian lottery) when it comes to managing property.

Since taking 100% of the wealth at death is a too big deterrent to saving, the golden middle probably lies somewhere in between taxing all and taxing nothing. Personally, I think that the fairest tax is somewhere under 50%, but close, I would settle on 45%.

Regular people, like you and me (yes I have seen your factory on google maps and go to such factory auctions often), are not impacted by current thresholds of estate taxes. Those somewhat above the threshold, can do a lot to reduce their estate tax bill.

i

Add to this the money gifted to spouses of children.

26,000*8*20=4,160,000 i

I think the death tax only applies to very unexpected deaths combined with poor planning. Anybody with half a brain can avoid it completely. But in general, I'm against politicians using confiscated wealth to buy the votes of the unproductive leaches on society. Why not make the tax voluntary? All liberals can donate all their wealth and that would offset conservatives helping their families.

Yes you can give away a lot of money. But I would rather keep control of my money until I die and let my wife have control until she dies. But this is not a good strategy with the current laws. In other words one can avoid estate tax, but it costs you to do so.

I believe there are ways to avoid Estate Taxes for the "big guys" too. Maybe you can not avoid all estate taxes, but the " big guys " can avoid all but about 10% by using insurance and trusts.

Dan

Yes you can give away a lot of money. But I would rather keep control of my money until I die and let my wife have control until she dies. But this is not a good strategy with the current laws. In other words one can avoid estate tax, but it costs you to do so.

I believe there are ways to avoid Estate Taxes for the "big guys" too. Maybe you can not avoid all estate taxes, but the " big guys " can avoid all but about 10% by using insurance and trusts.

Dan

Up untill a few years ago some people with very large estates would simply resign thier us citizenship and become citizens of another country to avoid US taxes alltogether. That loophole has been pluged, but it was a way to pass along wealth.

Best Regards Tom.

There is a way to do it with an intentionally defective trust set up.

John

That's one way of looking at it, but it's THEIR OWN MONEY, to do with as they wish.

The socialists want to steal it and give it to the undeserving.

Thanks, Rich

Whatever you do, have your will properly drawn up by someone who knows what they are doing.Do NOT use one of the do-it-yourself kits that claim to be "lawer approved", of course lawers (some, at least) approve of them - they stand to make much more in fees for their work in straightening out the do-it-yourself screw ups.

Not "give" it, they use it to buy votes and dependency on the government. "If you don't vote for Democrats, those stingy Republicans will cancel your benefits!" Didn't you see in the last election how Republicans were going to cancel social Security, Medicare and unemployment checks? Is there anybody that doesn't see the generational dependence on government hand-outs?

There's no law against people donating extra money over and above taxes. But it seems that Democrats want to donate OTHER people's money, not their own. Look at the statistics for charitable donations by conservatives and those by liberals.

Republicans are only a little less dangerous and can't be trusted with OUR money either.

Neither. The right number is Zero. It's their money, they've paid taxes on it. They should be able to leave it to whomever they wish. I'm sure the Hollywood Democrat millionaires name the US Treasury in their wills, correct?

Help me understand, Tom, how Social Security, which people paid into all their working lives, is a government handout?

That, and the super-rich (well over 10 mils).

The typical heirs are sometimes unprodictive leeches too.

I think that this is what a few honest billionaires are doing. They promise to give away over half of their wealth to charity.

Check out their list, it is impressive.

So it is not like the billionaires never give back, they do. But some narrow minded people never think of being grateful to the society that enabled them to be successful.

Warren Buffett was the person who started it. Conrad Hilton said "it is the duty of successful people to give back to the society from which their success was derived". This is how I feel, as well.

i

If no tax revenues are found, something will have to be cancelled, with mathematical certainty.

These statistics are skewed by religious conservatives "giving" to their churches, which are essentially social clubs for themselves (at best).

i