Vox article on inheritance

[Anonymous]

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

That's absolutely not the way this works. If someone has a $4.5m estate, her heirs inherit $4.05m.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

[Anonymous]

Anonymous wrote:Your parents were not very middle class if you will inherit $1million and so will your sister.

Im not that PP, but my situation is almost identical. My family was very middle class, and in my middle class neighborhood, we were at the lower end in terms of outwardly expressed wealth. I was always the kid that didnt have the new or cool thing like many other kids around me. And its because of my parents financial responsibility that we are set to inherit what we are.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

Eliminating the step up in basis, which seems to be very popular here, would hit every single estate, down to grandma who leaves a single share of AT&T to her grandkid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

Eliminating the step up in basis, which seems to be very popular here, would hit every single estate, down to grandma who leaves a single share of AT&T to her grandkid.

Yes. Seems fair.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

Eliminating the step up in basis, which seems to be very popular here, would hit every single estate, down to grandma who leaves a single share of AT&T to her grandkid.

Yes. Seems fair.

Why? Because you just want some sort of weird vengeance?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

Eliminating the step up in basis, which seems to be very popular here, would hit every single estate, down to grandma who leaves a single share of AT&T to her grandkid.

If capital gains taxes are so terrible, why do we have them?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

Eliminating the step up in basis, which seems to be very popular here, would hit every single estate, down to grandma who leaves a single share of AT&T to her grandkid.

Yes. Seems fair.

Why? Because you just want some sort of weird vengeance?

Vengence? Nope. I just think people should pay the same capital gains taxes that I pay. I don't understand why estates should be exempt from this.

[Anonymous]

My parents were immigrants to this country. They came with very little. My mother finished community college and worked the same job for 30 plus years. My dad the same. They scrimped and saved to buy a house and send us to college. They bought used and second hand everything. The money they saved will go to their grandkids.

People forget the tax laws do help hardworking people on occasion too. Rich folks do benefit from the current tax codes but so do hard working/sacrificing people like my parents.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

Eliminating the step up in basis, which seems to be very popular here, would hit every single estate, down to grandma who leaves a single share of AT&T to her grandkid.

Yes. Seems fair.

Ok that’s fine, but that’s what I mean when I’m confused about the focus here. I thought the debate was about the likes of Paris Hilton inheriting a huge fortune. But now I’ve been corrected. It’s actually about middle class people inheriting a house or retirement account worth a few thousand dollars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

The reason for step up basis and estate tax exemptions are small family owned businesses, particularly farms. The heir may receive land and buildings worth millions of dollars, none of which is liquid. You can't pay the tax bill without selling the business assets, but you can't continue to run the business without the assets.

This obviously doesn't apply to everyone receiving a large inheritance, but you can't write the law to let people inherit $3mil with no tax if it's a farm but pay tax if it's in securities. I mean, you could, but that would lead to all kinds of unintended consequences.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So just to be clear, specifically what estate tax are we proposing here?

Bernie has the most extreme proposal out that’s out there at the moment — 45% on estates between $3.5M and $10M and 77% for anything above $1 billion.

https://www.bloomberg.com/quicktake/the-estate-tax

Now, you may say that $3.5M is unequivocally a rich person’s estate (and on many metrics, it is), but it isn’t hard to imagine a lot of people in this area hitting that. If someone has a fully paid off home, and has invested relatively well over a 30-year career, it isn’t at all hard to imagine all of that coming out to at least $3.5M.

So people need to be ok with their kids paying 45% in taxes off of the sale proceeds from a home they inherited + any investments.

I’m trying to figure out what they want too. The current estate tax exempts everyone except the very rich. I thought that’s what liberals wanted. Progressive taxation that hits the very rich the hardest. But I seem to be hearing a lot of complaints that the estate tax doesn’t hit people who inherit small estates.

If you think $3.5m is s "small estate," I really don't know what to say to you.

The reason for step up basis and estate tax exemptions are small family owned businesses, particularly farms. The heir may receive land and buildings worth millions of dollars, none of which is liquid. You can't pay the tax bill without selling the business assets, but you can't continue to run the business without the assets.

This obviously doesn't apply to everyone receiving a large inheritance, but you can't write the law to let people inherit $3mil with no tax if it's a farm but pay tax if it's in securities. I mean, you could, but that would lead to all kinds of unintended consequences.

Right. I’m thinking about my neighbor, whose parents run a home renovation business in our neighborhood. They are both immigrants and clearly have worked hard for their business. It’s very successful and they have a very large house.

I don’t think it’s fair to put her and her husband in an impossible situation, tax-wise, should they inherit that business when her parents die.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is all so dependent on the family situation.

Barring unforeseen massive medical expenses (which certainly could happen), my sister and I are set to inherit a couple million dollars each + a fully paid off apartment in a pre-war building in Manhattan. Clearly we are exceptionally privileged.

That said, I do think we both have worked hard. My sister is a college professor and I’m a public servant. I don’t think we’ve taken our privilege for granted.

My parents did not come from money. My dad grew up middle class on Long Island, but his parents didn’t give him a penny after he turned 14. He was told to just go out and figure out how to make money. He got his first job from a friend who worked at a movie theatre, who was willing to look the other way around the fact that my dad wasn’t 16 yet (things were different in the late 60s).

My mom grew up working class in Queens (my grandma was a waitress and my grandpa was a glass blower). My mom was first in her family to go to college. My dad’s dad did go to college, but wouldn’t pay for my dad to go, so my dad got a scholarship.

They went to a law school ranked around 100, but graduated on the law review and both got excellent jobs. My mom stopped working when my sister and I were little, and my dad has worked his butt off as a lawyer for the last 40 years. Yes, he’s made a lot of money doing it, but he worked really hard at a job he did not like, to provide for his family.

So are my sister and I privileged? For sure.

Was there a lot of hard work involved? Absolutely.

No one is disputing your hard work of you or your parents. We just think that estates should be taxed. In this country assets are taxed everytime they change hands. Why should estates be different?

If my parents have already paid taxes on all of that money as they earned it, why should that money be taxed again?

Because you didn't earn it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is all so dependent on the family situation.

Barring unforeseen massive medical expenses (which certainly could happen), my sister and I are set to inherit a couple million dollars each + a fully paid off apartment in a pre-war building in Manhattan. Clearly we are exceptionally privileged.

That said, I do think we both have worked hard. My sister is a college professor and I’m a public servant. I don’t think we’ve taken our privilege for granted.

My parents did not come from money. My dad grew up middle class on Long Island, but his parents didn’t give him a penny after he turned 14. He was told to just go out and figure out how to make money. He got his first job from a friend who worked at a movie theatre, who was willing to look the other way around the fact that my dad wasn’t 16 yet (things were different in the late 60s).

My mom grew up working class in Queens (my grandma was a waitress and my grandpa was a glass blower). My mom was first in her family to go to college. My dad’s dad did go to college, but wouldn’t pay for my dad to go, so my dad got a scholarship.

They went to a law school ranked around 100, but graduated on the law review and both got excellent jobs. My mom stopped working when my sister and I were little, and my dad has worked his butt off as a lawyer for the last 40 years. Yes, he’s made a lot of money doing it, but he worked really hard at a job he did not like, to provide for his family.

So are my sister and I privileged? For sure.

Was there a lot of hard work involved? Absolutely.

No one is disputing your hard work of you or your parents. We just think that estates should be taxed. In this country assets are taxed everytime they change hands. Why should estates be different?

If my parents have already paid taxes on all of that money as they earned it, why should that money be taxed again?

Because you didn't earn it.

Ok fine, but what if that wealth was in the form of a business, as has been stated above, which makes it much more difficult to manage, tax-wise?

Are we supposed to put people inheriting small businesses in a tough situation? Do you propose somehow differentiating between liquid and non-liquid assets? How would one do that?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is all so dependent on the family situation.

Barring unforeseen massive medical expenses (which certainly could happen), my sister and I are set to inherit a couple million dollars each + a fully paid off apartment in a pre-war building in Manhattan. Clearly we are exceptionally privileged.

That said, I do think we both have worked hard. My sister is a college professor and I’m a public servant. I don’t think we’ve taken our privilege for granted.

My parents did not come from money. My dad grew up middle class on Long Island, but his parents didn’t give him a penny after he turned 14. He was told to just go out and figure out how to make money. He got his first job from a friend who worked at a movie theatre, who was willing to look the other way around the fact that my dad wasn’t 16 yet (things were different in the late 60s).

My mom grew up working class in Queens (my grandma was a waitress and my grandpa was a glass blower). My mom was first in her family to go to college. My dad’s dad did go to college, but wouldn’t pay for my dad to go, so my dad got a scholarship.

They went to a law school ranked around 100, but graduated on the law review and both got excellent jobs. My mom stopped working when my sister and I were little, and my dad has worked his butt off as a lawyer for the last 40 years. Yes, he’s made a lot of money doing it, but he worked really hard at a job he did not like, to provide for his family.

So are my sister and I privileged? For sure.

Was there a lot of hard work involved? Absolutely.

No one is disputing your hard work of you or your parents. We just think that estates should be taxed. In this country assets are taxed everytime they change hands. Why should estates be different?

If my parents have already paid taxes on all of that money as they earned it, why should that money be taxed again?

Because you didn't earn it.

Ok fine, but what if that wealth was in the form of a business, as has been stated above, which makes it much more difficult to manage, tax-wise?

Are we supposed to put people inheriting small businesses in a tough situation? Do you propose somehow differentiating between liquid and non-liquid assets? How would one do that?

I don't have a proposal, but it's entirely possible to differentiate between liquid and non-liquid assets (or between people and businesses, or between real property and non-real property)--all of these things are done in the law all the time. Pretending that one would be starting from scratch in coming up with legislative language on this is silly. In Maryland, for example, if you're subject to the estate tax on the basis of the value of a business, you get multiple years to pay that tax.