Prince Harry of Santa Barbara County

[A1Janitor]

The US federal estate tax exemption in 2023 is $12.92 million - per individual. If you estate is woth $130 million & you have 10 heirs, there's no tax. You have to be unbelievably wealthy to have a federal estate tax when you leave this world.

How does this work?

 

[nature boy]

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Fun fact … @nature boy’s SAF user emoji picture/image …

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It’s a Picture of WWE’s “Ric Flair” … possibly the greatest “Bamboozler” of all time …

Ric knows how to take your money …

Btw … you can go online and buy your very own Ric Flair bathrobes to wear how you choose …

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Basic weak sauce, it was to be expected though. So far no data- just feelings, sniff tests and here the average ad hominem.

 

[justme]

The US federal estate tax exemption in 2023 is $12.92 million - per individual. If you estate is woth $130 million & you have 10 heirs, there's no tax. You have to be unbelievably wealthy to have a federal estate tax when you leave this world.

I'm not opposed to inherited wealth. But I've seen a lot of it sqandered by heirs who've been raised in wealth without ever learning how to earn it.

I may be missing something as i have luckily not been party to inheritances, but it sounds like you are mixing federal estate tax and state inheritance tax. I dont think estate tax is affected by number of heirs.

 

[Day-Tripper]

Federal inheritance exemption: https://www.cnbc.com/2022/10/19/irs-bumps-estate-tax-exclusion-to-12point92-million-for-2023.html

The 50 different states have 50 different estate tax laws. https://taxfoundation.org/state-estate-tax-inheritance-tax-2022/

Cool map: https://files.taxfoundation.org/202...V*MTY3NDQzNjQ4Ny4xLjAuMTY3NDQzNjQ4OC41OS4wLjA.

No surprise that northeastern states have estate and/or inheritance taxes. Big surprise that California (which has a LOT of rich folks) has none. Or that Nebraska, Kentucky & Iowa have an maximum rates of 18%, 16% & 10%. Most states have none. Of course, this info applies to rich people for the most part. Nothing for 99% of us to worry about.

 

[Dr. Strange Love]

Basic weak sauce, it was to be expected though. So far no data- just feelings, sniff tests and here the average ad hominem.

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I like your emoji … I think it’s cool …

It’s so small on my iPhone … but his bright mop caught my attention … expanded it and I said … that’s the flamboyant Ric Flair

Btw … Ric isn’t the original Nature Boy … my research says Buddy Rogers is the original Nature Boy … before my time …
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[Day-Tripper]

How does this work?

Simple. Say you die and your estate is worth that $130 million figure I cited earlier. You have a will with your estate's attorney/executor/executix which lists 10 heirs - kids, usually, but not necessarily (Ivanka Trump just left a condo to her dog or something or other). No federal estate tax on your $130 million.

If your estate was woth $130 million & you had one heir getting the whole thing then $13 million was exempt, leaving the remaining $117K million subject to the federal estate tax. Which is 40% in 2023.

Makes sense, if you are wealthy, to hire good lawyers & accountants. Worth every dime.

 

[A1Janitor]

Simple. Say you die and your estate is worth that $130 million figure I cited earlier. You have a will with your estate's attorney/executor/executix which lists 10 heirs - kids, usually, but not necessarily (Ivanka Trump just left a condo to her dog or something or other). No federal estate tax on your $130 million.

If your estate was woth $130 million & you had one heir getting the whole thing then $13 million was exempt, leaving the remaining $117K million subject to the federal estate tax. Which is 40% in 2023.

Makes sense, if you are wealthy, to hire good lawyers & accountants. Worth every dime.

I think you need to brush up on estate taxes. The exemption is total, not dependent on heirs.

 

[Day-Tripper]

I think you need to brush up on estate taxes. The exemption is total, not dependent on heirs.

You might be right on that! My misreading! Don't ask Day Tripper for estate tax distribution advice.

 

[A1Janitor]

You might be right on that! My misreading! Don't ask Day Tripper for estate tax distribution advice.

If you accumulate a large estate, you can hire me!

We can set up irrevocable trusts.

I have done some estate and trust work. It bores me.

 

[jl123]

To clarify the estate tax (if that is even possible ):

1. The single exemption is $12.92 million. Double for a couple - $25.84 million
2. If one dies, the spouse can choose to preserve the deceased spouse's exemption so that when the surviving spouse dies they will retain the full $25.84 million exemption. This must be elected or they lose the ability to preserve the deceased spouse's exemption.
3. The estate tax is on the estate, not on the heirs. A $130 million dollar estate with 10 heirs would still be a $130 million estate, not 10 separate $13 million estates.
4. There are many in this category consider that are actually well off, not filthy rich. They do not own yachts and private jets. Most have earned their money through decades of hard work.
5. It is a legalized form of robbery to tax someone after they die, on money that was already taxed.
6. It is easy to support a tax that one does not have to pay - this is accomplished by identifying the "rich" as "anyone with more money me".

 

[StPaulDad]

I'm going to ask a serious question here, and I'm NOT trying to start a fight or anything like that. I find discussions here on the SAF are more "open and honest and less emotional" on the whole than elsewhere.

That being said, what does this mean: "...And they don’t pay their fair share of taxes..."

What does that REALLY mean? I hear that phrase SO often at work and elsewhere and I'm stumped. If the tax laws of the USA are applied to everyone, then how does one "not pay their fair share of taxes?"

A lot of this sentiment is not the estate taxes, but the fact that taxes as most Americans experience them are on income and the truly rich don't rely on income and thus don't pay much income tax. They pay much lower rates on capital gains, and then go on to stash money in places that most people don't even have names for. There are perfectly sound reasons that capital gains should be taxed lower, largely to encourage investments that build the economy, but the way the game is being played today does not serve those reasons very well. Holding assets to see them appreciate over time and paying a lower tax only after selling them should discourage speculation and churn, but high frequency trading dilutes the holding part and distortions such as getting some investment services taxed as capital gains erodes the investment side.

There is a real and substantial shift in who owns how much of the American economy largely based on the tax structures that are not keeping up with how wealth is earned and managed. With more and more of the county's assets flowing to a narrower and narrower slice of the population it's important to have the tax code match how money is used. If you want to make taxes feel more fair you need to require more capital holding (even 30 days would change everything) and tighten the investment definitions a bit as well to push more pay back into the income bucket. Increasing or eliminating the ceiling on social security taxes would help a lot too, not so much in paying the bills but in making things seem fairer. Reviewing the estate taxes falls into this category as well.

 

[Korab]

A lot of this sentiment is not the estate taxes, but the fact that taxes as most Americans experience them are on income and the truly rich don't rely on income and thus don't pay much income tax. They pay much lower rates on capital gains, and then go on to stash money in places that most people don't even have names for. There are perfectly sound reasons that capital gains should be taxed lower, largely to encourage investments that build the economy, but the way the game is being played today does not serve those reasons very well. Holding assets to see them appreciate over time and paying a lower tax only after selling them should discourage speculation and churn, but high frequency trading dilutes the holding part and distortions such as getting some investment services taxed as capital gains erodes the investment side.

There is a real and substantial shift in who owns how much of the American economy largely based on the tax structures that are not keeping up with how wealth is earned and managed. With more and more of the county's assets flowing to a narrower and narrower slice of the population it's important to have the tax code match how money is used. If you want to make taxes feel more fair you need to require more capital holding (even 30 days would change everything) and tighten the investment definitions a bit as well to push more pay back into the income bucket. Increasing or eliminating the ceiling on social security taxes would help a lot too, not so much in paying the bills but in making things seem fairer. Reviewing the estate taxes falls into this category as well.

This argument is complete BS. 50% of the public pays no income taxes. A significant portion of those actually get more money back than they pay in. While the marginal rate has gone down for higher earners, their percentage of tax paid has gone up. The “fair share” argument is nothing but a leftist talking point made into “truth” by the liberal media.

If we want taxes to be more fair, how about everyone pays them?

This BS argument is before you take into consideration property taxes and sales taxes and every other tax that is disproportionately paid by the top half of earners.

If people want to mad at someone, they should be mad at the bottom half of wage earners who contribute no income tax at all.

 

[StPaulDad]

Again, income tax vs capital gains taxes is the problem. Most of the bottom 50% have little to no capital gains because they own almost no assets. Meanwhile the very rich either don't derive their wealth from income or get compensated in ways that avoid income tax, such as stock options.

The question was "What does "fair share" mean?"

 

[Korab]

Again, income tax vs capital gains taxes is the problem. Most of the bottom 50% have little to no capital gains because they own almost no assets. Meanwhile the very rich either don't derive their wealth from income or get compensated in ways that avoid income tax, such as stock options.

The question was "What does "fair share" mean?"

When is it ever enough? What is the “very rich” and what percent of the population are you talking about? The top 1% of earners pay almost 43% of all income tax paid, a percentage that keeps going up, and is more than double what it was when their marginal tax rate was 70%. That’s just income tax - what’s the percentage when you add in capital gains, real estate taxes and sales tax? Keep adding to an already ridiculous tax burden and watch them leave completely - they have that ability. Just ask New York City how that works.

 

[OldRetSWO]

Again, income tax vs capital gains taxes is the problem. Most of the bottom 50% have little to no capital gains because they own almost no assets. Meanwhile the very rich either don't derive their wealth from income or get compensated in ways that avoid income tax, such as stock options.

The question was "What does "fair share" mean?"

How fair is it to pile Capital Gains tax on top of Corporate Income Tax. A company makes a Dollar in profit and then pays tax on it. Some part of what is left gets passed to the stockholders and they have to pay tax AGAIN??
I realize that there are different means of capital gains - the appreciation on art, real estate, etc does not otherwise get taxed and the government after all, wants it's piece of the action.

 

[A1Janitor]

Again, income tax vs capital gains taxes is the problem. Most of the bottom 50% have little to no capital gains because they own almost no assets. Meanwhile the very rich either don't derive their wealth from income or get compensated in ways that avoid income tax, such as stock options.

The question was "What does "fair share" mean?"

Let’s say I was extremely wealthy and don’t take a salary from the company I work for.

The company wouldn’t take the salary deduction, and therefore would be paying corporate taxes on that amount.

So though there aren’t “personal” income taxes paid, there are equivalent corp taxes paid, no?

 

[Korab]

How fair is it to pile Capital Gains tax on top of Corporate Income Tax. A company makes a Dollar in profit and then pays tax on it. Some part of what is left gets passed to the stockholders and they have to pay tax AGAIN??
I realize that there are different means of capital gains - the appreciation on art, real estate, etc does not otherwise get taxed and the government after all, wants it's piece of the action.

The ulta rich billionaire class who live that life are such a tiny fraction of even the top 1% that it barely makes sense to worry about them. There are 585 billionaires in the US according to one website I perused. Let’s say you taxed them each another 10 million a year just for being rich. That’s still less than one tenth of 1% of our annual budget - barely makes a dent for the country, but is it enough to make those families decide to relocate to somewhere a little more tax friendly?

 

[A1Janitor]

How fair is it to pile Capital Gains tax on top of Corporate Income Tax. A company makes a Dollar in profit and then pays tax on it. Some part of what is left gets passed to the stockholders and they have to pay tax AGAIN??
I realize that there are different means of capital gains - the appreciation on art, real estate, etc does not otherwise get taxed and the government after all, wants it's piece of the action.

They pay double taxation in your case as dividends, not capital gains - taxed as ordinary income.

When you sell art, real estate, etc - you pay capital gains tax on it (lower income people don’t) … and you pay depreciation recapture at higher ordinary rates. What isn’t taken into account unfairly is the appreciation portion that is inflation.

 

[Korab]

Again, income tax vs capital gains taxes is the problem. Most of the bottom 50% have little to no capital gains because they own almost no assets. Meanwhile the very rich either don't derive their wealth from income or get compensated in ways that avoid income tax, such as stock options.

The question was "What does "fair share" mean?"

Stock options are taxed, though maybe not in the year exercised, depending on which type. But the government always gets its piece eventually.

 

[A1Janitor]

Stock options are taxed, though maybe not in the year exercised, depending on which type. But the government always gets its piece eventually.

The very rich don’t take income - they borrow loans against their assets.

But not taking income is a reduction of expenses, so their corporations pay taxes. It washes.