Vox article on inheritance

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not really surprised by this, the net worth of the top 10% is >1M so why not a 500k+ inheritance?

This. My parents were very middle class, and my sister I should inherit about $1m each.

Listen, folks. Just because YOUR middle class parents are/were terrible with their money (thus leaving you little to nothing) doesn’t mean that other older people who were responsible and saved/invested their money throughout their lives (thus leaving an inheritance for their children - even *gasp* one million dollars!!!) were “rich” - they saved their money, now they have money! Some of you should try it.

That being said, I am struggling to even get through that article. It is structured in such a bizarre, haphazard way that it reads almost like a stream of consciousness. I really miss editors.

My dad was a teacher and my mom a SAHM. I grew up solidly middle class. I will inherit probably $1 million. A lot of that money will come from the sale of my childhood home that my parents bought for $50,000 and is now worth $500,000 and my dad has been receiving a decent pension and healthcare for years. My parents spend very little money and have saved all of the SS money they have received. So yes, it is possible to grow up middle class and still inherit a lot of money.

Yes, for the children of baby boomers that were fortunate enough to own a home that had massive appreciation in value. My parents also have a home worth $1m, but if they need to go to assisted living then the house will have to be sold to pay for that.

For middle class people a lot of inheritance is driven by whether your parents owned a home in an area where property values have increased coupled with how much (if anything) your parents end up spending on long term care.

I disagree about property values. The stock market has returned MUCH more than real estate (even in DC) the last 50 years.

Agree about long term care.

[Anonymous]

Anonymous wrote:

People whose parents were prudent with money dont “deserve” it but their parents deserve to pass on what they earned and saved and planned for their kids.

No they don't.

Society helped those parents make what they made. In many cases, those parents got a big head start from their own inheritance – they didn't do it alone. And even if they started from absolute zero, they built a business using roads that society paid for, with workers that society educated, in a peaceful and rule-of-law based society that government agencies and police departments created. Those parents benefited from society and they should pay back to society. Take what they earned and tax it, and make an equal playing field for more kids. No silver spoons for lazy, rich, entitled offspring.

My spouses parents were the children of Irish immigrants who had 22 siblings between them. They grew up in the upper midwest during the Depression and had nothing. They worked extremely hard and were very careful with their money. They lived in the same very modest house for 50 years, never bough name brand items (generic cola, for example), added water to ketchup, and drove cars for 300,000 miles. They gave my spouse an idyllic childhood. And they left each of their four kids nearly $1 million when they died.

No head start for them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not really surprised by this, the net worth of the top 10% is >1M so why not a 500k+ inheritance?

This. My parents were very middle class, and my sister I should inherit about $1m each.

Listen, folks. Just because YOUR middle class parents are/were terrible with their money (thus leaving you little to nothing) doesn’t mean that other older people who were responsible and saved/invested their money throughout their lives (thus leaving an inheritance for their children - even *gasp* one million dollars!!!) were “rich” - they saved their money, now they have money! Some of you should try it.

That being said, I am struggling to even get through that article. It is structured in such a bizarre, haphazard way that it reads almost like a stream of consciousness. I really miss editors.

My dad was a teacher and my mom a SAHM. I grew up solidly middle class. I will inherit probably $1 million. A lot of that money will come from the sale of my childhood home that my parents bought for $50,000 and is now worth $500,000 and my dad has been receiving a decent pension and healthcare for years. My parents spend very little money and have saved all of the SS money they have received. So yes, it is possible to grow up middle class and still inherit a lot of money.

Yes, for the children of baby boomers that were fortunate enough to own a home that had massive appreciation in value. My parents also have a home worth $1m, but if they need to go to assisted living then the house will have to be sold to pay for that.

For middle class people a lot of inheritance is driven by whether your parents owned a home in an area where property values have increased coupled with how much (if anything) your parents end up spending on long term care.

Also, whether one or both parents had pensions - which, combined with social security, allows a middle class person to hold onto that house worth $850k without a mortgage and still pay for assisted living, nursing homes, and end of life care. This is going the way of the dodo, and as more and more of us retire without a pension we will see the inheritances plummet in 40 or so years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

People whose parents were prudent with money dont “deserve” it but their parents deserve to pass on what they earned and saved and planned for their kids.

No they don't.

Society helped those parents make what they made. In many cases, those parents got a big head start from their own inheritance – they didn't do it alone. And even if they started from absolute zero, they built a business using roads that society paid for, with workers that society educated, in a peaceful and rule-of-law based society that government agencies and police departments created. Those parents benefited from society and they should pay back to society. Take what they earned and tax it, and make an equal playing field for more kids. No silver spoons for lazy, rich, entitled offspring.

And they paid taxes on everything every step of the way. Probably paid more in taxes than their dummer, lazier, less lucky etc, etc, etc counterparts. Those roads they used, on a relative basis, they probably paid for more of them. If they were successful, it’s idiotic to assume they used any government services for free. In fact, it’s the lumps who pay low taxes and create little value who should get punished. In my book, you create x number of jobs, pay x amount of taxes etc and you should be off the hook entirely for any estate taxes (which remember, are a tax on already taxed assets). Take out teachers, first responders, military and some healthcare/doctors and then publish everyone else’s overall contributions in taxes, charity, jobs created, etc and tout the successful and scorn the drips. And I am a youngish person with NO hope of receiving any resources via inheritance.

Let's assume all this is true. (I don't agree with much of it, but for the sale of argument . . . ) A trigger point (probably the most common one) for paying taxes in the US is the transfer of money or assets. You work, get paid, your employer transfers a salary to you, you pay taxes on it. You buy something at the store, the store pays taxes on the money it receives. You sell stocks or mutual funds, you pay taxes on your profit. Why should inheritance be reated any differently? Like it or not, it is a transfer of money or assets - why shoudn't it be taxed?

You say it is "a tax on already taxed assets" - that's true for virtually any asset. The money my employer pays me that I pay income taxes on? They already paid taxes on that. The money I pay to a store to buy groceries? I already paid taxes on that. Yes, a decedent already paid taxes in his or her estate - but the heirs didn't. Why shouldn't they?

A PP wrote, "parents deserve to pass on what they earned and saved and planned for their kids." First, many heirs aren't kids. But more fundamentally, why should they be able to pass it along tax free? I'm all for a reasonabel exemption, but $10m? Imagine if everyone could exempt the first $10m of wages from their income taxes.

Exactly. This PLUS as step up in basis in capital gains? That is crazy.

How about we stop taxing capital gains for everyone? Why do only heiresses get an exception?
How about we stop taxing income? Heiresses don't have to pay taxes on the first $11 million. Let's extend that to everyone else too.

[Anonymous]

Anonymous wrote:Not really surprised by this, the net worth of the top 10% is >1M so why not a 500k+ inheritance?

OMG - we have that many millionaires in the USA?

How is this possible and who are these people?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

People whose parents were prudent with money dont “deserve” it but their parents deserve to pass on what they earned and saved and planned for their kids.

No they don't.

Society helped those parents make what they made. In many cases, those parents got a big head start from their own inheritance – they didn't do it alone. And even if they started from absolute zero, they built a business using roads that society paid for, with workers that society educated, in a peaceful and rule-of-law based society that government agencies and police departments created. Those parents benefited from society and they should pay back to society. Take what they earned and tax it, and make an equal playing field for more kids. No silver spoons for lazy, rich, entitled offspring.

And they paid taxes on everything every step of the way. Probably paid more in taxes than their dummer, lazier, less lucky etc, etc, etc counterparts. Those roads they used, on a relative basis, they probably paid for more of them. If they were successful, it’s idiotic to assume they used any government services for free. In fact, it’s the lumps who pay low taxes and create little value who should get punished. In my book, you create x number of jobs, pay x amount of taxes etc and you should be off the hook entirely for any estate taxes (which remember, are a tax on already taxed assets). Take out teachers, first responders, military and some healthcare/doctors and then publish everyone else’s overall contributions in taxes, charity, jobs created, etc and tout the successful and scorn the drips. And I am a youngish person with NO hope of receiving any resources via inheritance.

LOL that the wealthy are all "job creators." Plenty live on passive investment income. If anything, middle-class people who spend a larger percentage of their income create more jobs, because jobs come from market demand. Rich people sit on far more of their money. Also LOL that they "paid taxes on everything." Rich people cheat more on their taxes -- the Treasury Department just released a report showing that the top one percent fail to report 20-25 percent of their annual income. And even if they report it, cap gains are still treated more favorably than income that the taxpayer actually worked for. And it's really strange that you think people being less lucky (or disabled, or less intelligent) should be punished and scorned, but you seem to have a very narrow view of success. Society requires a lot of people doing a lot of different jobs, and there's no shame in any kind of honest work. You might scorn your parents and think they are drips because they didn't make enough to leave you an inheritance, but we don't all think that way.

And while someone may have earned enough money to leave an inheritance, their kids didn't. They aren't creating jobs or building value. They are just spending money someone else made.

I want a confiscatory estate tax on estates over a couple million dollars. It's not good for society overall to create a class based on generational wealth. Passing down a home or something is fine. But even if I could leave my kid millions of dollars, I don't think I would be leaving her a good world to live in.

NP. A lot of people save for "unknowns" - kids' college, food, a roof, healthcare, and elder care in retirement. If everyone got free college, pensions (at least 50%) and free healthcare, they wouldn't save as much as they do. I know I would have spent a lot more money on vacations, new cars and upgraded my home if I didn't have to set aside money for those buckets. In return, I'd willingly pay a lot more taxes and a lower salary. I don't think that's what I'm getting in the "new world" the dems are promising. It will be more taxes with no returns.. Take from the middle class to pay the lazy and new fence-jumpers so they increase their vote banks can stay in power. Not gonna happen. I'm a lifelong democrat, but for once am real glad that they don't have full control of the Senate and likely will never control the Supreme Court. Remember, Biden won ONLY because a lot of people hated Trump. Let's not mess it up by going overboard.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not really surprised by this, the net worth of the top 10% is >1M so why not a 500k+ inheritance?

OMG - we have that many millionaires in the USA?

How is this possible and who are these people?

They are people who save because they want to retire one day.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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

My parents are lower middle class. I may one day inherit a house worth $20k with a $120k mortgage on it.

https://dqydj.com/net-worth-by-age-calculator-united-states/
The median net worth of someone aged 65-69 is $270k. At a net worth of $10k each, your parents are in the bottom 10% for this age group.

WOW. I didn't realize it would be that low. 270k is nothing to retire on. Yikes.

Most people depend on Social Security and Medicare. And that is fine.

Baby boomers and the next generation have also completely laughed their way to the bank while leaving decaying infrastructure, large amounts of debt, voting for stupppppiddddd and costly wars, tax cuts galore, huge sprawling suburban messes. They wanted everything then and now and screw the future. Completely for oil subsidies but not subsidies for new technology to remove dependence on gas because god forbid their gas be more than $5 a gallon, which is funny considering that its low and middle income people who are most affected. You are right that the current generation of 20-40s is finished with their crap. We have climate change, infrastructure, wealth inequality to deal with why you argue about whether your kid gets 2 million or 1 million. We are a generation sandwiched by whiny needy entitled people who complain about everything that we want to do to leave our world a better place for our children. You know the generation of kids that will actually live with all of the offloading of responsibilities. And part of that goes to wanting to leave 2 million not 1 million to your kids because this is why you want to leave your kids that money. You know money will insulate them, for a time, as good paying jobs get more scarce, as college tuition increases and home values increase, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not really surprised by this, the net worth of the top 10% is >1M so why not a 500k+ inheritance?

This. My parents were very middle class, and my sister I should inherit about $1m each.

Hate to break it to you, but your parents were not, in fact, middle class. They were wealthy compared to most other Americans.

We are middle class (HHI ~ $135K/yr in Loudoun County) and we will easily have $1M in savings by the time we retire, most of which will be left to our children.

Don't confuse retirement savings with income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

People whose parents were prudent with money dont “deserve” it but their parents deserve to pass on what they earned and saved and planned for their kids.

No they don't.

Society helped those parents make what they made. In many cases, those parents got a big head start from their own inheritance – they didn't do it alone. And even if they started from absolute zero, they built a business using roads that society paid for, with workers that society educated, in a peaceful and rule-of-law based society that government agencies and police departments created. Those parents benefited from society and they should pay back to society. Take what they earned and tax it, and make an equal playing field for more kids. No silver spoons for lazy, rich, entitled offspring.

And they paid taxes on everything every step of the way. Probably paid more in taxes than their dummer, lazier, less lucky etc, etc, etc counterparts. Those roads they used, on a relative basis, they probably paid for more of them. If they were successful, it’s idiotic to assume they used any government services for free. In fact, it’s the lumps who pay low taxes and create little value who should get punished. In my book, you create x number of jobs, pay x amount of taxes etc and you should be off the hook entirely for any estate taxes (which remember, are a tax on already taxed assets). Take out teachers, first responders, military and some healthcare/doctors and then publish everyone else’s overall contributions in taxes, charity, jobs created, etc and tout the successful and scorn the drips. And I am a youngish person with NO hope of receiving any resources via inheritance.

Let's assume all this is true. (I don't agree with much of it, but for the sale of argument . . . ) A trigger point (probably the most common one) for paying taxes in the US is the transfer of money or assets. You work, get paid, your employer transfers a salary to you, you pay taxes on it. You buy something at the store, the store pays taxes on the money it receives. You sell stocks or mutual funds, you pay taxes on your profit. Why should inheritance be reated any differently? Like it or not, it is a transfer of money or assets - why shoudn't it be taxed?

You say it is "a tax on already taxed assets" - that's true for virtually any asset. The money my employer pays me that I pay income taxes on? They already paid taxes on that. The money I pay to a store to buy groceries? I already paid taxes on that. Yes, a decedent already paid taxes in his or her estate - but the heirs didn't. Why shouldn't they?

A PP wrote, "parents deserve to pass on what they earned and saved and planned for their kids." First, many heirs aren't kids. But more fundamentally, why should they be able to pass it along tax free? I'm all for a reasonabel exemption, but $10m? Imagine if everyone could exempt the first $10m of wages from their income taxes.

Exactly. This PLUS as step up in basis in capital gains? That is crazy.

How about we stop taxing capital gains for everyone? Why do only heiresses get an exception?
How about we stop taxing income? Heiresses don't have to pay taxes on the first $11 million. Let's extend that to everyone else too.

+ 1. Taxes are supposed to fund spending. Not what's happening now though.. We are just printing money to spend and both parties agree with this approach. In that case, why tax at all? Cut all taxes and just print money..

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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

My parents are lower middle class. I may one day inherit a house worth $20k with a $120k mortgage on it.

https://dqydj.com/net-worth-by-age-calculator-united-states/
The median net worth of someone aged 65-69 is $270k. At a net worth of $10k each, your parents are in the bottom 10% for this age group.

WOW. I didn't realize it would be that low. 270k is nothing to retire on. Yikes.

Most people depend on Social Security and Medicare. And that is fine.

Baby boomers and the next generation have also completely laughed their way to the bank while leaving decaying infrastructure, large amounts of debt, voting for stupppppiddddd and costly wars, tax cuts galore, huge sprawling suburban messes. They wanted everything then and now and screw the future. Completely for oil subsidies but not subsidies for new technology to remove dependence on gas because god forbid their gas be more than $5 a gallon, which is funny considering that its low and middle income people who are most affected. You are right that the current generation of 20-40s is finished with their crap. We have climate change, infrastructure, wealth inequality to deal with why you argue about whether your kid gets 2 million or 1 million. We are a generation sandwiched by whiny needy entitled people who complain about everything that we want to do to leave our world a better place for our children. You know the generation of kids that will actually live with all of the offloading of responsibilities. And part of that goes to wanting to leave 2 million not 1 million to your kids because this is why you want to leave your kids that money. You know money will insulate them, for a time, as good paying jobs get more scarce, as college tuition increases and home values increase, etc.

I agree completely. And any Baby Boomer who held a steady job and isn't a multimillionaire missed a huge opportunity that probably won't be repeated in this country ever again.

[Anonymous]

Replacing pensions (which companies controlled) with IRAs (which employees control) helped create this new "inheritance class". You can't take it with you, so your kids (or whomever you want to give it to) get it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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

My parents are lower middle class. I may one day inherit a house worth $20k with a $120k mortgage on it.

https://dqydj.com/net-worth-by-age-calculator-united-states/
The median net worth of someone aged 65-69 is $270k. At a net worth of $10k each, your parents are in the bottom 10% for this age group.

WOW. I didn't realize it would be that low. 270k is nothing to retire on. Yikes.

Most people depend on Social Security and Medicare. And that is fine.

Baby boomers and the next generation have also completely laughed their way to the bank while leaving decaying infrastructure, large amounts of debt, voting for stupppppiddddd and costly wars, tax cuts galore, huge sprawling suburban messes. They wanted everything then and now and screw the future. Completely for oil subsidies but not subsidies for new technology to remove dependence on gas because god forbid their gas be more than $5 a gallon, which is funny considering that its low and middle income people who are most affected. You are right that the current generation of 20-40s is finished with their crap. We have climate change, infrastructure, wealth inequality to deal with why you argue about whether your kid gets 2 million or 1 million. We are a generation sandwiched by whiny needy entitled people who complain about everything that we want to do to leave our world a better place for our children. You know the generation of kids that will actually live with all of the offloading of responsibilities. And part of that goes to wanting to leave 2 million not 1 million to your kids because this is why you want to leave your kids that money. You know money will insulate them, for a time, as good paying jobs get more scarce, as college tuition increases and home values increase, etc.

Not sure what you are talking about, but aren't you the generation (currently 20-40) that are the children of Baby boomers who will inherit their wealth once they die? What are you complaining about?

[Anonymous]

Not that surprising. We are (upper) middle class and we already have 4 million to leave our kids, if we died tomorrow.

At a certain point, money makes money. Just leave below your means. The problem with people nowadays is that they want everything (the big house, the fancy cars, the lux trips, the big savings) at the same time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

People whose parents were prudent with money dont “deserve” it but their parents deserve to pass on what they earned and saved and planned for their kids.

No they don't.

Society helped those parents make what they made. In many cases, those parents got a big head start from their own inheritance – they didn't do it alone. And even if they started from absolute zero, they built a business using roads that society paid for, with workers that society educated, in a peaceful and rule-of-law based society that government agencies and police departments created. Those parents benefited from society and they should pay back to society. Take what they earned and tax it, and make an equal playing field for more kids. No silver spoons for lazy, rich, entitled offspring.

My spouses parents were the children of Irish immigrants who had 22 siblings between them. They grew up in the upper midwest during the Depression and had nothing. They worked extremely hard and were very careful with their money. They lived in the same very modest house for 50 years, never bough name brand items (generic cola, for example), added water to ketchup, and drove cars for 300,000 miles. They gave my spouse an idyllic childhood. And they left each of their four kids nearly $1 million when they died.

No head start for them.

They were white.