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Posted on 11/04/2004 9:32:48 AM PST by ncfool
Does a Re-election of President Bush and a Republican House and Senate give us the hope that true Estate Tax reform might be passed. I personally hope so. As a small Businessman its critical to my business as it is to other who employee American. --------------------------------------------------------
REASONS TO ELIMINATE THE FEDERAL ESTATE TAX
Estate tax rates, which range from 41% to 48%, are substantially higher than other tax rates - the lowest estate tax rate is almost as high as the highest income tax rate of 39.6%. Moreover, the estate tax is imposed on earnings and assets that have already been subject to income, social security, and other taxes at the federal and state level.
Under the current tax system, it is cheaper to sell the family-owned business before death rather than pass the business to one's heirs. Growing business can not remain competitive in a tax regime that imposes rates as high as 48% upon the death of the founder/owner.
Small business has long been recognized as the backbone of America's economy - employing almost 60% of the workforce and creating about two-thirds of the new jobs in the U.S. since the 1970's. Our tax laws should encourage rather than discourage the perpetuation of these businesses.
The estate tax costs jobs. Potential employment is lost when business owners decide not to expand or open another store because of the ever looming death tax, and current employment is destroyed when businesses are liquidated to pay estate taxes. If estate and gift taxes are eliminated in 1999, 275,000 jobs would be created between 1999 and 2010. (IPI Policy Report #150)
With Americans living longer, we need to encourage individuals/families to save and invest in order to plan for their future. However, the estate tax creates a disincentive to save, and instead, encourages consumption. The more assets one has at death, the more he/she may have to pay to the federal government.
The estate tax, which was intended to break up large concentrations of wealth and promote economic opportunity, has instead become a barrier to economic growth and job creation. This "disincentive to growth" effect of the estate tax is equivalent to doubling income tax rates. (Tax Foundation)
The estate tax has a negative impact on current business decisions. Critical resources are diverted away from investing in people and growth, and spent on attorneys, accountants and insurance. It is estimated that family-owned businesses spent approximately $33,138 over 6.5 years on attorneys, accountants and financial experts to assist in estate planning. (Gallup Poll, 1995)
The estate tax amounts to less than 2% of total federal revenues while costing the government and taxpayers approximately the same amount collected for enforcement and compliance. (Joint Economic Commitee Report, 1998)
Get it done, George. The estate tax is an absurdity.
It sounded, to me, that IRS reform is at the bottom of the agenda.
the estate tax does only one thing: keeps the upper-middle class from becoming truly wealthy. anyone/any family can get to the upper-middle generationally, but the death tax is an hellacious hurdle to jump.
KILL IT
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Yes, and yes on the dividend tax too. Both goners under Dubya.
2010 is a great year to die if you don't want to pay taxes. I am sure its on the radar screen to be discussed but since GB mentioned taxes today in his press conf. I just wanted to stir the Freepers up to push this issue.
Where is Jack Kevorkian I bet he's booking early appointments. How sick is this tax code.
Let's hope so
Preach It Brother !!!!!!!
Yes. GWB's original plan called for such reductions. Damned RINOs got in his way. Snow,Collins, McCain,Chafee,etc. They sicken me. One expects that type of behavior from Dems, but not Republicans. I say GWB bring these proposals back, and THIS time ram them down their throats if necessary!
I could live with your plan.
The repubs in the northeast need to be hearing from us too.
If the law stays the way it is, it will be interesting to see the statistics for deaths that officially occur in the final days of 2010, compared to the first few days of 2011.
And for obvious reasons, a lot of wealthy parents will be avoiding Christmas get-togethers with their kids in 2010. Why take a chance?
If the estate tax is finally eliminated, the current thinking (applicable to persons dying in 2010 only for the time being)is that $1.3 million in selected assets get a step-up in capital basis. The remainder of the estate does NOT get a step-up.
Simply put, this means that if you inherit grandpa's stocks or his business, and you later sell the asset, you pay capital gains taxes on all gains based on grandpa's capital basis. This is a nightmare waiting to happen.
Moral: don't wish for the end of estate tax until you are sure that a new nightmare is not waiting in the wings.
But it isn't income! This is money that has already been taxed! One of the outlandish policies of Old England that led to the independence of the U.S.A. was double taxation. Stop the madness!
Bingo.
This is a paperwork nightmare. When did grandma buy the stock and how do you really know her basis with reinvested dividends etc.
I have discussed this with conservative financial planners and it is a trade off they are willing to accept, not me.
While working as a Paraplanner planning firm I attended an AES seminar on the 2001 Bush Tax Cuts.
The attitude of the CPA's, CFP's and Attorneys, essentially "Oh those silly Congress, ha.ha ha". They are laughing all the way to the bank with such buffoonery and additional unproductive throughput for all of us as become the gatekeepers to this madness and they collect their toll to assist us in navigating through these waters. Jefferson and Hamilton are rolling over in their graves....
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