Nothing seems egregious if you aren’t affected. Oregon always has employed a “tax small groups” strategy - so they can pass them. Broad based taxes that would apply to a lot of people are avoided. Fortunately we were able to kill Measure 97 last year. What a horrible tax. They actually have a state law that prohibits a flat rate per person tax - which was just used in a recent Oregon Supreme Court case - proving once again they nickel and dime everyone to death - but it always seems like it’s not you, so hey why not right?
I’ve paid my Portland Arts Tax since the beginning. Do I wish it were more progressive (lower for the people who make the minimum qualifying income, more for people who make what I make and have no dependents, like me), and rolled into the income tax instead? Yes. So some of these things do affect me.
I could be talked down to a 90% inheritance tax from my default 100% position, maybe.
Maybe.
Well, a $45 annual dollar tax is a bit different than an estate tax - come talk to me when you’re set to lose $200-$300K because of a tax instead of $45. Then you can tell me how you like it.
This presumes you have 200-300K to lose, in which case a bloo bloo.
Aren’t you actually gaining $2.8M? I’d be OK with gaining that instead of whatever the $45 tax is. I mean obviously the situation would suck because someone died but at least I’d have $2.8M all of a sudden.
What exactly is the argument here other than you (like most people) don’t like to pay taxes? The estate tax is one of the most progressive forms of taxation. Moreover, it’s economically sound: the ultra-rich don’t churn their money back into the economy in the same way that the other 99% do. So, if you view taxation as a zero-sum game, where would you prefer that tax dollar come from, if the estate tax were eliminated?
I paid a hefty, hefty federal income tax bill last year. I’ll do the same this year and will likely do the same the year after. Did I particular enjoy “losing” all that money? No, who does? But am I out there advocating that my tax bill should be cut by raising that of others? No. There’s a difference between disliking having to pay a tax and believing that it is fundamentally inequitable or that it is bad policy.
Look, if one is in a position to leave something like three million dollars to one’s heirs after 20 or 30 years of retirement, of which the heirs get to keep more than 90%, like it or not, that person is an extremely fortunate individual, and they (the heirs) are very fortunate to have that person as a parent/uncle/whatever. Noblesse oblige and all that. Taxes are the price we pay for civilization (laws, police and a court system, without which the accumulation of wealth would be impossible). An inheritance tax (it should be indexed to inflation–I don’t think Oregon’s is but it should be) works against inequality of opportunity.
I sure wish my folks were in a position to leave me almost 2.8 million dollars upon their deaths (I hasten to add that they did more than fine by us kids-- although at 56 I’m hardly a kid anymore, and my dad passed last year). I’m looking to be well enough set for retirement myself, barring another financial crisis in the next couple of years. If my post-retirement investments do amazingly well, I won’t feel my nephews (I don’t have kids) especially put upon by having to pay an estate tax that is more than reasonable.
Saying you’re in favor of eliminating the estate tax is exactly equal to saying you think the families of these eight guys should own every dollar of wealth in the world. Instead of, you know, just half.
Can you bother to read all my posts instead of just the last one?
Can you bother to read all my posts instead of the last one?
You mean the ones where you were conflating retirement with death for some weird reason?
The last few pages of this thread are pretty confusing.
I read all your posts. If there was a point in there beyond a general statement that you don’t enjoy taxes, I missed it. Tax policy can’t be determined in a vacuum. You can’t say, for any single tax, “this feels too high” or “this feels too low”. Yet you seem to be doing exactly that. You have to consider the revenue it generates, whether that revenue can be generated in other ways, and what the costs of each are.
If you have a particular point you want to make, make it. Complaining that multiple people aren’t groking your posts isn’t helping to make things more clear.
You know, there’s a very simple resolution to this infinitely repeating “death tax” kvetching: let’s just repeal the estate tax entirely and also repeal the special tax exemption that causes inherited wealth to not be considered taxable income, US Code Title 26 section 102 which reads: “Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.” This is an exception to the general rule of income, US Code Title 26 section 69, which reads: “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived…”
The reality is that for the vast majority of Americans, the estate tax is a tax break. Normally receiving a chunk of income like an inheritance would subject the recipient to a hefty income tax, just like a lottery winner (yes, lottery winnings, gambling winnings, etc. are taxable.) But we wrote an exception into the US Code that treat inherited wealth differently. It’s true that the top estate tax rate is higher than the top income tax rate but there is that $5.5 million dollar (per parent so $11 million for a couple bequeathing wealth to children) exemption, which means that for 99.99% of the US population, the estate tax is a tax break compared to the general standard of income taxation.
If you really hate the estate tax, then you must hate the income tax even more. And if you hate that tax, you basically don’t believe in paying for government.
I mean people who receive a net $2.8 million inheritance after taxes as in the Oregon example above (paying $200K out of $3 million leaves you with $2.8 million net) I don’t get the complaint. I mean sure, $2.8 million is less than $3 million but anyway you slice it that is more than 30X the median household net worth of roughly $90,000 in the US. And the alternative would be to tax that $3 million at the income tax rate. At the federal level, that would be a 39.6% rate IIRC which would produce a tax of $1.08 million leaving a net of $1.92 million. So sure, let’s do away with the so-called death tax and just tax all income equally.
Yeah, I’m plenty happy I wasn’t taxed on my father’s estate. If he had been worth millions… I wouldn’t have really cared about paying the taxes on that because I’d be a fucking millionaire.
The first $5 million is tax free from the Feds. I think that’s more than fair.
Has anyone in this thread argued it wasn’t?
Let me see if I can explain my pain with this tax in more direct terms. Yes, $3M is a lot of money, but:
If you scrimp & save for 35-40 years, you can retire at 55 or 60 years old with this amount as you can squirrel away 10-15% a year starting when you’re in your early 20’s if you choose to live frugally & conservatively. So let’s pick 55 - you’ve got another 15 years before uncle sam begins to kick in on your retirement savings (while you can start as early as 62, the maximum benefit is at 70 today which you want to wait for).
With a significant chunk of your net worth in real estate (probably $500K-$750K for a paid off house), you’re going to have $1.5-$2M in cash or equivalents. This is keeping your spends down around $60K/Year for 15 years all the while hoping / praying that the investments you have don’t go to shit (of course by this time they should be meager anyway - moving more into bonds & safer securities but land based securities are tied to the real estate market) and then you need to ask “how long am I going to live?” and you want to time running out of money by that time. So you pick 90 or 95 because you’re doing what you’ve done your entire life and that is to live conservatively. If you do this right, they can bury you with your last quarter. And don’t forget just because you’re in retirement, you’re going to have to draw down $100K a year to get that $60-$70K to spend because Uncle Sam not going to stop taking taxes.
I don’t know about you, but a $60K budget / Year isn’t “super” or “ultra rich” in my book.
By the time you hit 70, that $2M in cash is probably closer to $1M.
So while you may have all this wealth accumulated to live to 90-95, If you die early and have money left over, personally I’d like all of it to go my kids so maybe they can retire 5-10 years earlier but I have 3 kids - so “poof” that huge amount isn’t quite so big anymore split three ways. Oh sure they’ll be happy but personally, I’d turn over in my grave knowing the government got a single penny out of that savings. I feel that strongly about the government benefiting from my bad luck. Now, this is a good chunk of change, but it’s not going let them retire right away and I don’t want them to get even less of what I earned.
So my problem is that there is a cut-off for the ultra rich. There is a difference if you are making > $1M EVERY year, but when it takes you 40 years of hard work and saving to accumulate that, I’ve never felt rich and it really makes me irritated seeing all the liberal “give the money back to the state” because you keep looking at this as “super rich”, which fucking pisses me off.
And you keep assuming ONE person is going to get this. It the vast majority of cases, this is going to be spread out over several children and perhaps even more depending upon how the will is created and it’s not the huge numbers you keep assuming.
Now, hopefully I live to 95 and they can bury me with my last quarter, which is the plan so nobody gets anything, but if I die early, I want this to go to my kids and let them retire maybe at 45 instead of 55. If you cut $100K out of that amount, now you’re going to add even more time for them.
So as they say, I’ve paid my dues, fuck off if you want any more.
And all of that is exempt because the first $5 million is exempt.
You’re complaining about (as near as I can tell) a state tax when we were talking about a Federal one.
Federalism and all. Don’t like it, bitch at your state representatives/governor. They’re the only ones able to do anything about it.
They aren’t getting a penny out of the savings. They’re getting it out of the windfall income of your children.
And this is how aristocracies happen. Seriously? Your entire argument is that your children should be able to retire at 45 while everyone who wasn’t fortunate enough to have a wealthy parent (and someone able to draw down $100k a year entirely from savings is definitely wealthy) has to work till 62 or likely even later? It’s not exactly making me sympathetic.
That’s great, but you’re dead. Your children haven’t paid their dues.