New death tax proposals -- both Rep and Dem. : LUSENET : Beyond the Sidewalks : One Thread

I was watching the Republicans and Democrats both making statements about proposed changes in the so-called Death Taxes late last night. I stayed up way too late listening to what both sides had to say, and I started to wonder about their proposals. The fact is, I saw benefits in both systems, but I thought that the Democratic proposal had the most merit, especially for the small business owners, farmers, homesteaders, and all the truly Small Folk.

What I got out of it was that the Democrat's proposal would take effect next year, and that there would be an individual $4 million exemption, so that people could pass on their family farms and businesses without having to liquidate just to pay the final taxes.

The Republican proposal would reduce the death taxes next year from 55% to 53%. In ten years, it would be down to 46%. This would be an across-the-board rule, whether you have a tiny homestead, or are a multi-billionaire. These figures were supplied by the Democrats, but the Republicans did not refute them.

It seemed to me that both sides realized that it was manifestly wrong to be taxing people on what they'd already paid taxes on (sometimes twice already) and still managed to save for their children's future, but they couldn't seem to get together on it.

Which plan do you, the small folks in this country favour and why? I'd like to see some real discussion on this, pro and con on the plans, because much as I can see the point that it is only fair to have one law for all, I can also see that the Republican plan isn't going to do much of anything to those who will lose their farms and businesses in the next ten years and possibly beyond.

-- Anonymous, April 05, 2001


Julie, there was a really good discussion in one of the local Sunday papers here (Seatle Post Intelligencer.) Perhaps they still have it in the online edition (I would imagine.) It was interesting because it gave real-life stories of how people have been (or have not been) affected by the existing legislation. Farmers too.

I am also curious as to why Bill Gates' dad and others who are super wealthy, are lobbying against the Rep's proposal (and I think Warren Buffet and maybe Geo. Soros, too.)

I'll go read the stuff (there's pages) and perhaps post back. I don't know enough about it. It will take me a day or two (I'm a fast reader but a slow comprehender!!!)

What I don't quite understand is why these potentially affected families aren't forming some kind of living trust? But I don't know enough about them.

-- Anonymous, April 05, 2001

It was the Seattle Times (we subscribe to the PI but they share the Sunday edition.) Here's the link (sorry you have to cut and paste) bin/texis/web/vortex/display?slug=tax01&date=20010401&query=estate+tax


-- Anonymous, April 05, 2001

Here's a hot link:

Estate tax by the numbers: Fair or not, it's liable to change

-- Anonymous, April 05, 2001

Thanks Jim!

One of these days I will learn how to do that!

-- Anonymous, April 06, 2001

Of one thing I am certain. I have many more questions than answers but from where I sit I don't think that there should be an across the board death tax rate. Where to draw the line? I don't like the idea of losing the family farm but what constitutes a family farm today. 200k 10 mil ? While I don't go along with socialism in that the rewards of our efforts be distributed to all, I don't think that wealth being concentrated in fewer hands is a good thing. I struggle with the idea of leaving my estate to my daughter or not. I tell her not to depend on anything as I have a favorite charity in mind. This has instilled in her the confidence that not only she can but she will make it on her own. Of course I'm sure she will get something but I prefer her not to know that at this time. Best close lest my ignorance become even more apparent. :) jz

-- Anonymous, April 08, 2001

After reading more, I think I am more confused than ever. The whole question of tax shelters, capital gains, and even noblesse oblige seems to pop up. Things sure would be easier if we all had a flat tax, say 10% or something. Our own income tax documents go on for page after page. Tax law is so complicated that only CPAs and tax attorneys (and probably lobbyists) are the only ones making any profit.

It does seem to me that by abolishing the estate tax laws, that there will be a real risk of continuing to concentrate wealth in the hands of the few. It also seems that family farms are not really the victims as much as they are being portrayed to be. But they make a nice "poster child" for the proposed legislation.

What do you think?

-- Anonymous, April 11, 2001

From where I sit, I think the "family farm" died some time ago and what is left does not come close to what we would consider the family farm.

-- Anonymous, April 11, 2001

Perhaps today it's the family business. As some of the examples cited in the article. Small businesses, not big corporations or conglomerates, but big enough to be "worth" a lot. Businesses that have been in families into now the second or third generation.

My head has all sorts of questions, conflicting ideas, etc. My gut, or wherever that little arbiter of fairness lives, says, "Taxes have been paid, and paid, and paid, and paid, on EVERYTHING we acquire, use, save, and/or try to pass on to loved ones. Why should there be a further tax?" Listening to my head again, I would say at least that the limits should be set a lot higher than they currently are. And while I'm on limits, I just recently socked away my IRA for the year. That limit is the same as it was 20+ years ago -- when are they going to raise that? Okay, enough cranking from me . . . .

-- Anonymous, April 11, 2001

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