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To: Poet who wrote (4336)	1/8/2003 12:25:50 PM
From: thames_sider	Read Replies (1) \| Respond to of 7689

I suppose, if you have estate tax AND inheritance tax on the same estate, that does seem harsh... is that what you're saying? But the inheritor hasn't been taxed on the money until he gets it. Why should the rich (who seem to do awfully well at sheltering their money anyway) get to keep their children rich, and still evade taxes? I figure, once you're dead, that's it.

To: Poet who wrote (4336)	1/8/2003 12:43:11 PM
From: Original Mad Dog	Read Replies (2) \| Respond to of 7689

Here's a blurb that summarizes the gradual phaseout of the estate tax: dinkytown.net the estate tax exemption is scheduled to increase from $1 million in 2003 to $3.5 million in 2009, with estate taxes completely eliminated in 2011. At the same time, the maximum tax rate will be gradually reduced from 55% to 45%. Unfortunately, the old exemption and the maximum tax rate will return in 2011 unless the new law is extended by congress before then. For example, in 2004 an estate valued at $2,500,000 would have a $1,500,000 exemption. This leaves $1,000,000 subject to estate taxes. According to the Estate Tax Rates Table we would have $500,000 taxed at 45%. We would also have $500,000 taxed at the maximum 2004 rate of 48%. This which was reduced from the 49% shown on the Estate Tax Rates Table to reflect the maximum estate tax rate of 48% applicable in 2004. The tax would then be $500,000 X 45% plus $500,000 X 48% or a total estate tax of $465,000. As for your question: Why should heirs to large estates pay double taxes when heirs to estates under a million pay none? The principal argument in favor of having estate taxes (other than the insidious notion that rich people's gains are inherently ill gotten and subject to government confiscation and redistribution) is that having too much wealth concentrated in inheritances tends to make it difficult for the poor and middle classes to become upwardly mobile and financially successful. It is something along the lines of....wealth confers opportunity, and if opportunity is not available to all, then those at the bottom and middle of the pile will eventually conclude that there really is no fair chance at success and so they will stop striving and start making trouble.... and besides it's not fair to them not to have opportunity. I don't buy that argument for a second when it comes to the America that currently exists. In modern America, the most powerful source of opportunity over the past half century has been education, especially higher education and especially advanced education in science, technical, and professional fields. Typically these fields require long years of study which is often boring and taxing, and requires personal sacrifice and strong work ethic and commitment. Walk across most college campuses on a Thursday or Friday or Saturday night, and there will be a few kids in the library and quite a few more kids at the local watering holes. Multiply that by a couple hundred weekends over the course of somebody's late teens and early twenties, and in a whole bunch of cases you will see the difference between opportunity and success. We need to make sure that the education itself remains available, and there our biggest failing as a society is in the primary and secondary grades and the inequities that persist there (I promise I won't talk about vouchers here! <g>). But getting back to the estate tax, I don't think taxing Bill Gates or Joe Business Owner or Iowa Farmer on his estate does anything at all about spreading opportunity throughout society. Maybe it had an effect during the time of the Rockefellers, but now I think its effect is pretty minimal. It just provides societally useless employment for people hired to get around it. I suppose it does encourage the superrich to give more of it away to good causes (here Bill Gates has done some very good things, as have others), but I think a lot of today's superrich feel strongly about doing that anyway.