US House votes to cut estate tax

WASHINGTON (Reuters) - In an election-year bid by Republicans to eliminate most taxes on inherited wealth, the U.S. House of Representatives on Thursday passed a sweetened compromise aimed at building support in the Senate that would exempt all but the biggest estates from taxation......

The House voted 269-156 for the bill, which also slashes rates for estates still subject to the tax, which Republicans prefer to call the "death tax." Forty-three Democrats joined the Republican majority backing the bill.
...
"What we're doing today is ... jeopardizing the resources to pay for health care and education, and even our national defense because some of you believe the richest of the rich should be protected from an equitable distribution of tax liability," Rangel said......

It is unclear if the Senate will pass the measure even though it contained a timber industry tax break aimed at winning over wavering Democrats from logging states.

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/22/AR2006062201303.html

Because they know they'll be kicked out at that point.

I have firmly believed this for a long time now. Time is getting short, and their "wish list" is not yet complete.

****Ooops! Time is getting shOrt, not shIrt....:-)

they're trying to ruin things for the next Congress, which will be Dem. then they can blame all the disasters on them.

But only if someone is keeping a close eye on voter registration, voting, and counting...

$2 million. that's the house, the cars, 401k, savings. our wills are set up that the whole estate goes to animal charities. i certainly would not want that taxed.

I think 2M is the cutoff. The only thing that's taxed is what the estate makes between the time you pass away and the funds are distributed. And that's usually pretty low, not adding up to much. It's tax on earnings - not on who inherits. Hope that's clear. We just went through a lot of this after my mom in law died in '04.

husband covered for over $400,000.

But let's look at savings and investments. If you have a savings account and the account makes interest between the time the owner dies and another person inherits that money - the estate has to pay tax on the interest earnings it made during that time period. You see, the estate has to file a tax return for that period on earnings it makes after the owner dies. Well, someone has to file a tax return for the estate. You understand.

This is not affected by the laws being passed by Congress, as far as I know. My mom in law passed away in May of '04. We filed a return in '04 and '05 because her estate had some earnings during those years.

savings, etc. she had a stroke and was in a nursing home for the last 10 years of her life. everything went. when she passed, there was $1500 in her account. my husband and i and his sister had to pay for the funeral.

:hug:

deteriorated. my sister in law would visit a few times a week and my mother in law, even though she had dementia would say "bitch, bitch". she always felt that her daughter should take care of her like she did with her mother. some people are capable of doing that, others are not.

my sister recently watched her father-in-law die. he had throat cancer and the radiation burnt out his throat. he couldn't eat. had to be fed with a tube. my sister or her husband would do it, but sometimes he had to go to the hospital. last time the doctor said he thought it was time. my brother in law said "just keep him comfortable". he also said to the doc "we're kinder to our animals". in other words we put them down so they don't suffer.

my sister said seeing someone die was a spiritual experience.

when you are still in your 50's before it gets too expensive.

and i take medications to sleep. we have my husband covered.

the funny thing is except for the chronic fatigue i'm in good health, i eat healthy, exercise, my weight is right for my size.

we're paying about $117 a month for my husband. not too bad. at least i have piece of mind as far as him being covered.

if we had universal health care like every other "civilized" country we wouldn't have to worry about these things. i have met so many people on the DU who can't get health insurance because of pre-existing conditions.

my sister and her husband each pay $300 a month for a policy with a $5,000 deductible.

subject to income tax, but if it is part of your estate, it is subject to the estate tax.

It could be structured to be outside your estate too by a trust owning the life insurance, but that's not what regular people do.

Life insurance death benefits are not taxed as income though to the deceased or the beneficiaries.

To most people they are part of the estate and therefore subject to the estate tax.

of years ago, the idea was that life insurance was the only way for modest people to leave much of an estate, and was also a great way for wealthy people to pay the taxes on their estate so that it passed intact. Other financial people hate that about life insurance.

a case where it is worth it to spend some money to get legal advice.

but it will go down to $ 1 million after 2010 under current law.

A compromise around $ 5 million seems reasonable to me.

It's just a blank form. Can anyone else?

I couldn't get into the site yesterday but I assumed that was a traffic problem.

and who knows Paris Hilton may really go for a nice old white man who was in Congress.

I must be in the wrong party.

last week. They are just right wingers hiding behind the Democratic label.

I just understand that Democrats have a point that there's well, a hell of a lot more pressing priorities... something that may be OK in isolation can be emphatically not OK in context... something I know well from translating languages.

That $700 billion gets added on to the National Debt which you and I will be paying for.

You really don't have a problem paying more taxes so that billionaire babies get to keep more of the money their ancestors earned?

I don't need to be whipped around with fake math to be convinced of things. I don't like that, sorry.

I imagine you'd like the rosey estimates from the American Heritage Foundation better than those of the Center on Budget and Policy Priorities.

http://www.cbpp.org/6-5-06tax.htm

Welcome to DU. :hi:

The Center on Budget and Policy Priorities estimated a repeal would cost $776 billion in lost revenue plus $213 billion in interest the federal government would pay on debt. The Joint Committee on Taxation said a repeal would cost just over $369 billion.

Yes my $700 billion number is an estimate, but it is in the range of the numbers floating out there. Whether it is $369 billion or $989 billion as reported by these agencies, it is a huge number which will go in the pockets of the uber rich and be paid for from the pockets of the non-uber rich.

THAT seems highly exaggerated. Apparently those who replied are not appreciating that the math included more than one component as portrayed.

But whatever. You read the part of my reply you wanted to and ignored the part that might have sounded more reasonable to you.

Presumably the 5000 person figure represents the number of people who would have paid the estate tax over a known period. In addition to time, the figure would be based on population size, mortality rates, estate size and average beneficiaries per estate. All estimates I have seen are for 10 years, although the 10-year span sometimes differs between estimates.

It's unfortunate that details such as time span are often lost in the details. Obviously, without clearly defined parameters, all estimates are meaningless.

All I'll say is what you just said there is exactly what's wrong with trying to sound thoughtful on a message board.. and AGAIN, people did not bleeping read the part where I said that context - you know, war, the national bleeping debt - cutting the estate tax can fairly be called completely unjustifiable, because whatever the virtues or not of doing it on its own in pie in the sky principle, there's actual bleeping bills to pay.

But whatever!

While there are somewhere between 3 to 8 million millionaires living in the US, this new estate tax only benefits people who have estates worth $2 million or more (estates under that amount are not currently taxed). Only a small minority of millionaire households are multi-millionaire housholds. From Wikipedia (which uses Forbes #'s) only 54,000 households in the US and Europe are multi-millionaire households.

Now how many of those 54,000 are in the US and how many will die in the next ten years? I took a rough estimate of 10%. Some articles are saying it effects only 1,500 people, some say 12,000. There is no set number being used in official reports, but I used a 5,000 number to illustrate that very few people will be affected. Even if all the 54,000 multi-millionaires lived in the US and all died in the next ten years, that is still a very small number of households to be benefited by this very expensive tax cut.

http://en.wikipedia.org/wiki/Millionaire

According to the numbers I wasn't effected by the estate tax, but I was.

When my aunt died, I got a lesser share, so did my brother, sister, mother, father, aunt's uncles, cousins, etc.

The numbers used are fraudulent. They say that only one person was effected when my aunt died, her. She was deceased though. She wasn't effected. It was her 20-30 heirs who were.

The numbers are dishonest, and I think most people using them know they're dishonest.

It only efects the upper .1 % of people. Yeah well it effected me and I'm not in any upper .1 % of anything.

20 - 30 people waiting for the poor woman to die to get a chunk of her assets! As I understand it, you all got dsomething. The tax rate wasn't 100%, was it?

to share with each other, let alone pay a tax on a free gift.

Standard argument is the tax only effects a very few people who die.

I said the tax effected many times more people than the statistics say because instead of the one person who died being effected it is her/his 20-30 heirs who are effected and most of them are no where near rich.

Then the argument turned to "you're ll a bunch of greedy bastards."

Is the correct answer one or thirty?

No way to know by this thread because the mathematical question got turned into insults rather than math. Probably on purpose.

As far as my aunt's estate went, none of us had any idea she had $ 1 million. No one was drooling anywhere.

I was just pointing out the obvious fact that a lot more than one person was effected by the $ 180,000 estate tax paid.

Person A - When Clinton ran for reelection he won far more states than he won the first time he ran.

Person B - Actually Clinton won one less state the second time he ran.

Person A - Person B is a Bush loving Iraqi baby killer.

are a LOT more estates that would be bigger than $600,000 (the level at which taxes began under the old law, and to which we will return in 2011). It only appears that the number of large estates is that low because people who would otherwise have been subject to the tax usually have wills that designate the affected amounts to charity instead.

In some parts of the country -- especially on the coasts -- many estates in the coming years will be over $600,000 based on the value of the family home alone.

"wealthiest 2% of all Americans" (according to the IRS here http://www.irs.gov/businesses/small/article/0,,id=108143,00.html) just doesn't feel right to me. I do have trouble with this "gift" to a very select few who least need it - even in isolation of the issues of the AMT, minimum wages, poverty, war, etc. There are plenty of loopholes and work arounds to avoid much of, if not all of the tax.

Just sayin'.

right, 2% of Americans is a lot more than 5000 people. What about the content of my post?

Just sayin'....

I have a hard time understanding people so willing to accept giving 27 or more percent of their hard EARNED income to the government and yet are against an INHERITANCE tax, where there was no sacrifice of time, no giving of one-self, no labor involved - just happen to be part of a gene pool of a wealthy individual.

Why should it be taxed again upon distribution to the heirs?

gains, which make up a large chunk of these large estates. Income taxes aren't paid on the appreciation of assets until they are sold. It's not a "double taxation".
If we're so concerned about collecting taxes more than once, why do we collect sales tax on used items? A single car might go through 3-5 owners, sales tax collected each time. Why is the interest on my savings account taxable income - I paid income tax when I originally earned that money.

The orignal "owner" is not being taxed again - they're dead. It's the heirs of the inheritance being taxed. I'm afraid your response still doesn't help me to understand why people so willing accept the taxing of their EARNED income, yet not an inheritance.

http://www.cbpp.org/6-17-05tax.htm

I personally think we should go to a national sales tax instead of an income tax, and only sales tax on new items to the end user.

However, a portion of an individuals estate is purchased through their savings from their income, which is taxed when initially earned. Those dollars are then taxed again, if the estate reaches a certain value -- ie the double taxing I was referring too.

begin with, as you stated. Then there is the cost basis for the assets that are to be liquidated, and the cost basis for the heirs is not what what was paid by the deceased, but the current market value on the date of death. So Aunt Nellies art collection that she paid $100,000 for in the '30's is now worth a cool 3 million. That appreciation has not been taxed. Her nephew now sells the collection for 3.5 million. Capital gain is due on the half-million above the cost basis as of the date of death. No income tax or captial gain was ever paid for the appreciation from $100,000 to 3 million and that is what the estate tax was set up to try to recapture. It's not some evil double taxation. Aunt Nellie paid income tax on whatever money she earned to make the $100,000 purchase. That was more than washed away be inflation/asset appreciation that was basically written off when her nephew's cost basis got bumped up to the value as of the date of her death.

In this case, it is being transferred from the dead to the living. As far as I know, I'd pay a tax on any gifts or prize winnings the same way even though someone else has already paid a tax when the money came to him/her/it(corporation).

Why should I have to pay sales, property, etc. tax?

hard working Americans (sans wealthy parents) continue to slide into abject poverty.

Bravo! :sarcasm: :puke:

Class War is here to stay. Bank on it! ;)

To me Americans are Americans, rich or poor, and some issues bind all kinds of Americans.

how many pay the tax AFTER accounting for donations to charity. Most people with larger estates, knowing that they are going to be hit with the estate tax, choose to leave the affected amount to charity instead. So the 2% number doesn't tell us how many would have paid the tax if they didn't avoid it by giving it to charity instead.

Before the current law, people with estates greater than $600,000 were subject to large estate taxes. This would be a lot more than 2% of the population, considering house prices alone.

And when the current law expires, we'll be back to the old law.

Truth is better than fiction.

his wealth. And he says his son is in the same camp.


I really think the current political wind of the wealthy/republican party is that they see America being completely destroyed, and so want to loot the coffers while the coffers have something to loot.

I know that's what is happening, but... for what?

Gold? Diamonds? Perhaps if they convert their 'papers' into those commodities, and before it's too late, they'd better hurry up because, who's into 'printed paper' coming from a destroyed country?

many ways to give it away if he wants to.

But not all teh people think the same way.

The Kennedy family has chosen to keep its money in trust funds to keep it as far away from taxation as possible generation after generation.

Each had their choice and both choices are legl.

The GOP will destroy what is left of America.

And if they are smart, they'll use it.

The Republicans voted down a minimum wage increase, and voted for a decrease of estate taxes for the wealthy.

I hope somebody's home over at the DNC.

In the same WEEK even! We should start running ads NOW. -JJ

give up that 5th weekly pedicure.. I mean really, can you imagine? (shudder)

It pays to be wise. Plan your estate so that there won't be much to tax.

Republicans argue the tax hurts small business owners and farmers who want to pass on enterprises to their heirs.

How does it hurt these dead small business owners and farmers?

And like I stated previously, my father never heard of one family farm going out of business because inheritance taxes in his 38 years with the ASCS now called Farm Services. He knew every farmer in the county. A county with a 720 square miles.

...it's the property taxes. As more rural land gets built out, property values on adjacent farms go up. Combine that with heirs seeing buyout offers on their acreage that represents more than the land could earn in a decade, especially while paying more in property tax... that's what puts the farms and ranches out of business.

Apparently, you are not the only one who can't find a farm that was run out of business by the estate tax:



More...

And repeal every single one of *'s tax cuts. And what's up with estate taxes? The inheritors didn't earn that money, it is a unearned gift that should be taxed appropriately. We could actually have universal health coverage if people wouldn't be so damn stingy with taxes. I'm willing to pay a lot more for the good of everyone.

everything in '06 won't neccesarily have any real meaning - the term Democrat certainly seems to have lost it's meaning and purpose. Now days it simply means "not a Republican" - nothing more. Americans have lost their country, Progressive Dems (and old Conservative Republicans) have lost their party. The plutocracy has gotten greedy and seem to be in bed with the PNACers and neo-cons these days.

This is why I'm not AT ALL optimistic abouit the Dems retaking Congress.

Until they clean their own house of far right enablers, they're incapable of leading- and voters see that.

And the DSCC expects people to give money tio support these 43? Not one nickle from me- that's for sure.

Kick all these bloated a**holes out! Democrat or Republican, they only care about THEMSELVES, not the benefit of our once great Country. :( :thumbsdown:

I don't think even they'd be willing to go that far. ;-)

They gain nothing, though their heirs do. Stating they gain just seems a poor way to phrase it.

That seems insanely impossible to even try to estimate.

We have no idea when he will die, or how much money he will have when he dies.

Hell, no matter how much Bush leaves office with, he could very well blow it all within five years on a business venture.

It could be his most successful venture ever and he could still bankrupt himself within five years.

to eliminate the estate tax? It ran a few weeks ago and listed about 10 families including the Waltons, the family behind Campbell soup and the familky behind the M&M Company.

http://www.faireconomy.org/press/2006/pc_and_ufe_expose_campaign.html

WASHINGTON, D.C. – The multimillion-dollar lobbying effort to repeal the federal estate tax has been aggressively led by 18 super-wealthy families, according to a report released today by Public Citizen and United for a Fair Economy at a press conference in Washington, D.C. The report details for the first time the vast money, influence and deceptive marketing techniques behind the rhetoric in the campaign to repeal the tax.

It reveals how 18 families worth a total of $185.5 billion have financed and coordinated a 10-year effort to repeal the estate tax, a move that would collectively net them a windfall of $71.6 billion.

The report, available at www.faireconomy.org/reports/2006/EstateTaxFinal.pdf, profiles the families and their businesses, which include the families behind Wal-Mart, Gallo wine, Campbell’s soup, and Mars Inc., maker of M&Ms. Collectively, the list includes the first- and third-largest privately held companies in the United States, the richest family in Alabama and the world’s largest retailer.

These families have sought to keep their activities anonymous by using associations to represent them and by forming a massive coalition of business and trade associations dedicated to pushing for estate tax repeal. The report details the groups they have hidden behind – the trade associations they have used, the lobbyists they have hired, and the anti-estate tax political action committees, 527s and organizations to which they have donated heavily.

more...

a decrease in the estate tax but an increase to the "birth tax"
by virtue of its increase to the national debt.

NEW ESTATE TAX “COMPROMISE” EVEN COSTLIER THAN PREVIOUS ONE

http://www.cbpp.org/policy-points6-23-06.htm

snip>

The proposal uses a gimmick — linking the estate tax rate to the capital gains rate — that allows it to be presented differently to groups on different sides of the estate tax debate. To proponents of repealing the tax, the proposal can be described as having estate tax rates of 15 percent and 30 percent. Conversely, to make the proposal sound more appealing to those who are concerned about the high cost of eliminating most or all of the tax, it can be presented as having estate tax rates of 20 percent and 40 percent. Both descriptions cannot be true, of course. The proposal is designed with the hope of having it both ways politically.

I'd call them Shameless Whores, but that wouldn't be kind of Prostitutes.

purpose was to prevent wealthy families from gaining too much power over the generations.