A deduction and a credit are two different things. If all you get is a deduction from your gross or net earnings, then you reduce your tax base, saving a percentage of the sales or property tax you paid at a percentage equal to your highest taxable rate. You're still paying tax twice, because the savings on your income taxes from the deduction is still only going to be a percentage of the property/sales tax paid.
I didnt say you are being credited, Im pointing out you are not being double taxed. If I spend $5000 in property tax, I am not paying federal income tax on that same $5000. Only taxed once.
A hypothetical: (1) You earn 50,000 a year. You don't spend a dime. Your income is taxed 30%, so you pay 15,000 in taxes. Your net is 35,000. (2) You earn 50,000 a year. You spend that money and are taxed 5,000 sales tax. You deduct that 5,000 on your income taxes, meaning you have 45,000 taxable income. Your income is taxed 30%, so you pay 13,500 in income taxes. Your net is 31,500. You have paid taxes twice, once on income, once on expenditures. Your net is 3,500 less as a result of the sales tax. How is this not a double tax?
Ugh, how many times do we see the same arguments recycled on this issue. The spectacle of poor Ma & Pa getting chased off the family farm... it's a myth. The truth is the, estate tax falls almoste excusively on highly valuable estates - over 1.5m - which is rising soon anyway. For farmers, there are extraordinary provisions worked in to their benefit. There are all sorts of benefits, credits, deductions & provisions written into the system to keep them from having to pay. The exemption can be as high as $8 million in certain circumstances. As a consequence only 4% of all farmers will ever pay the estate tax, 2/3 of which is paid by farmers whose farms are worth over $5 million. http://www.ers.usda.gov/Briefing/FederalTaxes/questions/ This of course, leaves aside the fact that Farmers receive a dizzying array of federal largesse to begin with in the form of subsidies & price supports despite the fact that its economically wasteful for us to do so. I don't know why republicans don't b**** about agribusinesses like US Sugar and ADM that are on the government teat like few others for amounts that dwarf the 20-30 billion or so that federal estate taxes cost (and that tiny proportion that comes from farms). As for family owned businesses - they too have all sorts of provisions written in to keep the ma & pa store from going out of business - this is why the federal estate tax is generally not responsible for this happening. And the double taxation, thing - good grief people. Understand this - every dollar in your wallet today has not only been double taxed, but triple taxed, quadruple taxed, and google taxed. Taxes are not taxes on the pieces of paper the money is printed on, they are a portion of the value that is created when transactions occur.
The truth is the, estate tax falls almoste excusively on highly valuable estates - over 1.5m - which is rising soon anyway. $3M is the limit for 2005, if bypass trusts are used. Most people with $3+M estates do not accumulate that type of wealth from being foolish. People with this kinda money plan their estates and make sure that both spouses get the $1.5M exception.
tax consequences don't mean jack(a smaller reason to why rich getting richer).... rather its the business environment that is making the rich get richer.... its the other smaller stores that are getting squeezed out of business due to the inventory effeciencies that exist in major "big-box" businesses...being AS cost effecient is becoming hard for these smaller stores.... that's the bigger problem.... the opputunity to get rich from starting a business is going down the drain... anyway i did'nt read any posts before posting my own bs
By-pass trust charitable remainder trusts, family limited partnerships, qualified personal residence trusts; don't worry the rich and their lawyers will be just fine either way.
The IRS is now snacking on family limited partnerships, so only venture there with high price council.
This mess started with tax arguements, I guess we'll be arguing tax til the end... This time line is drawn largely from the work of Richard B. Morris, in particular his Encyclopedia of American History. 1764 Sugar Act. Parliament, desiring revenue from its North American colonies, passed the first law specifically aimed at raising colonial money for the Crown. The act increased duties on non-British goods shipped to the colonies. Currency Act. This act prohibited American colonies from issuing their own currency, angering many American colonists. Beginnings of Colonial Opposition. American colonists responded to the Sugar Act and the Currency Act with protest. In Massachusetts, participants in a town meeting cried out against taxation without proper representation in Parliament, and suggested some form of united protest throughout the colonies. By the end of the year, many colonies were practicing nonimportation, a refusal to use imported English goods. 1765 Quartering Act. The British further angered American colonists with the Quartering Act, which required the colonies to provide barracks and supplies to British troops. Stamp Act. Parliament's first direct tax on the American colonies, this act, like those passed in 1764, was enacted to raise money for Britain. It taxed newspapers, almanacs, pamphlets, broadsides, legal documents, dice, and playing cards. Issued by Britain, the stamps were affixed to documents or packages to show that the tax had been paid. Organized Colonial Protest. American colonists responded to Parliament's acts with organized protest. Throughout the colonies, a network of secret organizations known as the Sons of Liberty was created, aimed at intimidating the stamp agents who collected Parliament's taxes. Before the Stamp Act could even take effect, all the appointed stamp agents in the colonies had resigned. The Massachusetts Assembly suggested a meeting of all the colonies to work for the repeal of the Stamp Act. All but four colonies were represented. The Stamp Act Congress passed a "Declaration of Rights and Grievances," which claimed that American colonists were equal to all other British citizens, protested taxation without representation, and stated that, without colonial representation in Parliament, Parliament could not tax colonists. In addition, the colonists increased their nonimportation efforts. 1766 Repeal of the Stamp Act. Although some in Parliament thought the army should be used to enforce the Stamp Act (1765), others commended the colonists for resisting a tax passed by a legislative body in which they were not represented. The act was repealed, and the colonies abandoned their ban on imported British goods. Declaratory Act. The repeal of the Stamp Act did not mean that Great Britain was surrendering any control over its colonies. The Declaratory Act, passed by Parliament on the same day the Stamp Act was repealed, stated that Parliament could make laws binding the American colonies "in all cases whatsoever." Resistance to the Quartering Act in New York. New York served as headquarters for British troops in America, so the Quartering Act (1765) had a great impact on New York City. When the New York Assembly refused to assist in quartering troops, a skirmish occurred in which one colonist was wounded. Parliament suspended the Assembly's powers but never carried out the suspension, since the Assembly soon agreed to contribute money toward the quartering of troops. 1767 Townshend Acts. To help pay the expenses involved in governing the American colonies, Parliament passed the Townshend Acts, which initiated taxes on glass, lead, paint, paper, and tea. Nonimportation. In response to new taxes, the colonies again decided to discourage the purchase of British imports. "Letters from a Farmer in Pennsylvania to the Inhabitants of the British Colonies." Originally published in a newspaper, this widely reproduced pamphlet by John Dickinson declared that Parliament could not tax the colonies, called the Townshend Acts unconstitutional, and denounced the suspension of the New York Assembly as a threat to colonial liberties. 1768 Massachusetts Circular Letter. Samuel Adams wrote a statement, approved by the Massachusetts House of Representatives, which attacked Parliament's persistence in taxing the colonies without proper representation, and which called for unified resistance by all the colonies. Many colonies issued similar statements. In response, the British governor of Massachusetts dissolved the state's legislature. British Troops Arrive in Boston. Although the Sons of Liberty threatened armed resistance to arriving British troops, none was offered when the troops stationed themselves in Boston. 1769 Virginia's Resolutions. The Virginia House of Burgesses passed resolutions condemning Britain's actions against Massachusetts, and stating that only Virginia's governor and legislature could tax its citizens. The members also drafted a formal letter to the King, completing it just before the legislature was dissolved by Virginia's royal governor. 1770 Townshend Acts Cut Back. Because of the reduced profits resulting from the colonial boycott of imported British goods, Parliament withdrew all of the Townshend Act (1767) taxes except for the tax on tea. An End to Nonimportation. In response to Parliament's relaxation of its taxation laws, the colonies relaxed their boycott of British imported goods (1767). Conflict between Citizens and British Troops in New York. After a leading New York Son of Liberty issued a broadside attacking the New York Assembly for complying with the Quartering Act (1765), a riot erupted between citizens and soldiers, resulting in serious wounds but no fatalities. Boston Massacre. The arrival of troops in Boston provoked conflict between citizens and soldiers. On March 5, a group of soldiers surrounded by an unfriendly crowd opened fire, killing three Americans and fatally wounding two more. A violent uprising was avoided only with the withdrawal of the troops to islands in the harbor. The soldiers were tried for murder, but convicted only of lesser crimes; noted patriot John Adams was their principal lawyer. 1772 Attack on the "Gaspee." After several boatloads of men attacked a grounded British customs schooner near Providence, Rhode Island, the royal governor offered a reward for the discovery of the men, planning to send them to England for trial. The removal of the "Gaspee" trial to England outraged American colonists. Committees of Correspondence. Samuel Adams called for a Boston town meeting to create committees of correspondence to communicate Boston's position to the other colonies. Similar committees were soon created throughout the colonies. 1773 Tea Act. By reducing the tax on imported British tea, this act gave British merchants an unfair advantage in selling their tea in America. American colonists condemned the act, and many planned to boycott tea. Boston Tea Party. When British tea ships arrived in Boston harbor, many citizens wanted the tea sent back to England without the payment of any taxes. The royal governor insisted on payment of all taxes. On December 16, a group of men disguised as Indians boarded the ships and dumped all the tea in the harbor. 1774 Coercive Acts. In response to the Boston Tea Party, Parliament passed several acts to punish Massachusetts. The Boston Port Bill banned the loading or unloading of any ships in Boston harbor. The Administration of Justice Act offered protection to royal officials in Massachusetts, allowing them to transfer to England all court cases against them involving riot suppression or revenue collection. The Massachusetts Government Act put the election of most government officials under the control of the Crown, essentially eliminating the Massachusetts charter of government. Quartering Act. Parliament broadened its previous Quartering Act (1765). British troops could now be quartered in any occupied dwelling. The Colonies Organize Protest. To protest Britain's actions, Massachusetts suggested a return to nonimportation, but several states preferred a congress of all the colonies to discuss united resistance. The colonies soon named delegates to a congress -- the First Continental Congress -- to meet in Philadelphia on September 5. The First Continental Congress. Twelve of the thirteen colonies sent a total of fifty-six delegates to the First Continental Congress. Only Georgia was not represented. One accomplishment of the Congress was the Association of 1774, which urged all colonists to avoid using British goods, and to form committees to enforce this ban. New England Prepares for War. British troops began to fortify Boston, and seized ammunition belonging to the colony of Massachusetts. Thousands of American militiamen were ready to resist, but no fighting occurred. Massachusetts created a Provincial Congress, and a special Committee of Safety to decide when the militia should be called into action. Special groups of militia, known as Minute Men, were organized to be ready for instant action. 1775 New England Restraining Act. Parliament passed an act banning trade between the New England colonies and any other country besides Great Britain. New England Resists. British troops continued to attempt to seize colonial ammunition, but were turned back in Massachusetts, without any violence. Royal authorities decided that force should be used to enforce recent acts of Parliament; war seemed unavoidable. Lexington and Concord. British troops planned to destroy American ammunition at Concord. When the Boston Committee of Safety learned of this plan, it sent Paul Revere and William Dawes to alert the countryside and gather the Minute Men. On April 19, Minute Men and British troops met at Lexington, where a shot from a stray British gun lead to more British firing. The Americans only fired a few shots; several Americans were killed. The British marched on to Concord and destroyed some ammunition, but soon found the countryside swarming with militia. At the end of the day, many were dead on both sides. The Second Continental Congress. The Second Continental Congress convened in Philadelphia on May 10. John Hancock was elected president of Congress. George Washington is named commander-in-chief. On June 10, John Adams proposed that Congress consider the forces in Boston a Continental army, and suggested the need for a general. He recommended George Washington for the position. Congress began to raise men from other colonies to join the army in New England, and named a committee to draft military rules. On June 15, Washington was nominated to lead the army; he accepted the next day. To pay for the army, Congress issued bills of credit, and the twelve colonies represented in the Congress promised to share in repaying the bills.
A myth never happened. This has obviously happened in the past. It may be rare but realize it does happen, and when it does something needs to change.
Let's do away with subsidies. I mean if the price of milk triples I'm sure you would be the first one complaining that the poor get hurt more about a $6 gallon of milk than Bill Gates. The subsidies are in place to keep food costs at a price that everyone (you know especially the ones you say get raped by the tax syastem) can afford. Now go did up some subsideis and point out tobacco and other programs that are abused, but the subsidies are put in place to keep nutritional items at prices everyone can afford.
I read that this effects less than 100 families a year (if not fewer). The problems can be addressed almost in its entirity by proper estate planning. Those families with $3+M farm based estates and "I Love You" wills are foolish people with money. What was that old adage again?
Did you even bother to read the thread? From Andymoon's post, page 3 (from Bill Gates article, which I believe got this info from the Times. (I've actually posted this before too) "Proposals to reform the tax have been blocked since 2000 by the "all or nothing" repeal lobby, which understands the peril of not having smaller estates as camouflage. Once exemptions rise above $3 million, it becomes impossible to find a credible and photogenic farmer or restaurant owner who will complain about what opponents call the "death tax." It's hard enough to find them now. The pro-repeal American Farm Bureau was asked to produce an example of a farmer who had lost a farm because of the estate tax. It could not identify a single one." There is zero evidence in support of your position that "this obviously happened in the past". When farms are taxed, and in the very few instances when when people inherit multimillion dollar farms that are taxable- they raise some capital to pay the very modest fees, and they pay it. Or they sell and pocket their multimillion dollar proceeds less the fees. Why am I supposed to cry for them?
You're swinging and missing again, chuck-o, and don't seem to have much knowlege in this area. Who do you think pays for those subsidies for the carton of milk? Why, it's you, chuck-o. Agricultural subsidies aren't in place to keep food costs low, they are in place to allow the American agribusiness sector to compete with cheaper foreign foodstuffs. (news flash, other countries can grow rice, cotton, etc. It's a big, fat, welfare transfer to large conglomerates - which results in overproduction (see the EU's CAP disaster of butter mountains and olive oil lakes) and which imbalances the global economy as well as it keeps the agricultural nations from having a market for their goods. It's the epitome of economic waste when you inefficiently produce goods that can be produced cheaper somewhere else. This has been common knowledge for hundreds of years dating back to Adam Smith.
Here's the problem. The wealthiest farmers have proper estate plannings, it's the mom and pops who may be worth a lot on paper that get screwed by the estate tax. You either need to repeal it or simplify it so people who don't deserve it (hard workign formaers, small busines sowners) don't get screwed. Right now the folks effected are the ones with wealth (sometimes in cash, often in land, business assets) who don't have access to financial planners get effected. Any yes I read that a fool and his money are soon parted. But you know what these folks make a whole lot of money they atre not fools, they just get screwed by a system.
I don't need to read it. I quoted you as saying "The spectacle of poor Ma & Pa getting chased off the family farm... it's a myth." Now you're saying you didn't say that? Or you saying a family farm has never been lost due to estate taxes? Interesting. You spout off get called on it and tell me to educate myself. Try getting your facts right.
