What are your thoughts on inheritance taxes?

2016-04-08T12:06:31-04:00

My belief is that many people had to work very hard to get their wealth and pay their share of taxes along the way, why shouldn't someone who just inherits that same wealth without working for it pay a share as well.

Response by TSgt David L. made Apr 8 at 2016 12:12 PM

2016-04-08T12:12:33-04:00

I disagree with having to pay taxes on money that was previously taxed.

Response by PO3 Steven Sherrill made Apr 8 at 2016 12:30 PM

2016-04-08T12:30:34-04:00

PFC Al Sethre It is kind of like double jeopardy for finances. The Fifth Amendment to the Constitution states:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

This protects us from double penalty for one offense. Inheritance Tax allows the Government to impose a tax penalty on money which has already been taxed. If the Fifth Amendment protections were extended to cover our money, inheritance tax would be in violation. I am highly opposed to these taxes. Regardless of where the inheritance comes from. Most of the time an inheritance is coming from a family member. Therefore the family is paying tax on the same money twice. Even if it is from outside of the family, the person bequeathing the money has already paid tax on it. Why is it right for the government to ask for additional tax to be paid on top of what has already been paid? I think that it is not. So in conclusion, inheritance taxes are a bad idea in my opinion.

https://www.law.cornell.edu/constitution/fifth_amendment

Fifth Amendment

Amendment VNo person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself,...

Response by PO2 Mark Saffell made Apr 8 at 2016 12:37 PM

2016-04-08T12:37:32-04:00

IT's BS. Why does the Government deserve what I worked so hard to leave to my kids. They didn't work for it or take the chances so what gives them a right to steal what belongs to me and my kids???

Response by Sgt Private RallyPoint Member made Apr 8 at 2016 12:43 PM

2016-04-08T12:43:45-04:00

Money that has already been taxed should not be taxed again. Below is basic information about inheritance and estate taxes:

An inheritance tax is a state tax that you pay when you receive money or property from the estate of a deceased person. Unlike the federal estate tax, the beneficiary of the property is responsible for paying the tax, not the estate. However, as of 2015, only eight states impose an inheritance tax. And even if you live in one of those states, many beneficiaries are exempt from paying it.

Comparison with estate tax

The key difference between estate and inheritance taxes lies in who is responsible for paying it. An estate tax is levied on the total value of a deceased person's money and property and is paid out of the decedent’s assets before any distribution to beneficiaries.

However, before an estate tax is due, the value of the assets must exceed certain thresholds that change each year, but generally it’s at least $1 million. Because of this threshold, only about 2 percent of taxpayers will ever encounter this tax.

How inheritance tax works

Once the executor of the estate has divided up the assets and distributed them to the beneficiaries, the inheritance tax comes into play. The tax amount is calculated separately for each individual beneficiary, and the beneficiary must pay the tax. For example, a state may charge a 5 percent tax on all inheritances larger than $2 million. Therefore, if your friend leaves you $5 million in his will, you only pay tax on $3 million, which is $150,000. The state would require you to report this information on an inheritance tax form.

States with an inheritance tax

The federal government does not have an inheritance tax. The eight states that impose an inheritance tax include Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Tennessee. Of course, state laws are subject to change, so if you are receiving an inheritance, check with your state's tax agency. The tax rates on inheritances can be as low as 1 percent or as high as 20 percent of the value of property and cash you inherit.

Response by TSgt Kenneth Ellis made Apr 8 at 2016 12:53 PM

2016-04-08T12:53:06-04:00

The Kenndys got around them by creating a foundation. And when it desolved they would pay less in taxes. That's why the Clintons give any thing they earn to th foundation. And a farmer who is land rich but cash poor gets screwed.

Response by 1LT Aaron Barr made Apr 8 at 2016 1:20 PM

2016-04-08T13:20:16-04:00

I would disagree with your premise precisely because the person who earned the money paid taxes on it as it was being earned. Oftentimes, several times. Moreover, inheritance is not a guarantee. Say, for example, I had a kid who turned out to be a complete a-hole, embarrassed me and disgraced my name constantly and drove me mad my whole life. Now, I'd probably be inclined to leave any money I had to somebody else. For me personally, this would probably be a blood relative I felt to be deserving but I wouldn't rule out a charity if no other relative was found worthy.

There's another issue with inheritance taxes that the late, great, Nobel Laureate, Dr. Milton Friedman pointed out; at heart, we're a family society. He noted, and I'm sure you've seen yourself, how many parents will sacrifice present happiness for the future happiness of their children even when having every reason to believe that their children will be better off than them even if those children don't get a dime. Imposing heavy inheritance taxes removes any incentive for thoughts to the future and encourages profligate spending today. Hell, again using myself as an example, if I knew that every last dime of my possessions would be taken by the state upon my death, I'd spend every dime I had, give as much of it as could be given away without record to my kids then go on welfare if for no other reason than to spite such a government.

Response by Alan K. made Apr 8 at 2016 1:23 PM

2016-04-08T13:23:38-04:00

Shouldn't be any......! They get you even after you die...!

Response by MCPO Roger Collins made Apr 8 at 2016 1:29 PM

2016-04-08T13:29:19-04:00

Most of us worked our butts off to provide for our kids/grand kids future. Not only that, but it is double taxation and more. I have paid taxes on every penny I made, on every penny of profit from my investments, with the few exemptions I was able to muster in accordance the IRS rules. My net worth has been accumulated despite the government's confiscatory policies. States and Feds have no moral rights to come back for more.

Response by MCPO Roger Collins made Apr 8 at 2016 1:31 PM

2016-04-08T13:31:04-04:00

Spoken by one that, in all probability, doesn't have an inheritance coming with the passing of his relatives.

Response by SSG Robert Webster made Apr 8 at 2016 1:34 PM

2016-04-08T13:34:28-04:00

And what about gift taxes? Some gifts are non-taxable and you can even get a credit for them and others, well it appears that the government wants another slice of the pie.

Response by CPT Pedro Meza made Apr 8 at 2016 1:50 PM

2016-04-08T13:50:05-04:00

Inheritance taxes should be treated the same as lottery taxes, you end up with 50%-40%. I work hard driving to lucky 7 Elevens.

Response by CPT Jack Durish made Apr 8 at 2016 2:01 PM

2016-04-08T14:01:38-04:00

Why should we punish the acquisition of wealth by any means? Earnings. Inheritance. Whatever. The most important issue we need to encourage is thrift. Tax people on what they spend.

Response by LTC Private RallyPoint Member made Apr 8 at 2016 2:03 PM

2016-04-08T14:03:18-04:00

Cash that is post tax should not taxed again, BUT, land should be reassessed and taxed on any capital gains (and tax credit for any capital loss).

The bigger issue for me is dividend tax, which is income, but taxed at a lower rate. Only the wealthy typically own significant enough quantities of dividend-paying stocks and funds to matter, and they are the least in need of a special tax rate. Dividends should be taxed at the highest tax rate.

Response by PO2 Steven Barkley made Apr 8 at 2016 2:06 PM

2016-04-08T14:06:23-04:00

To the best of my knowledge all property that is inherited has already been taxed at time of purchase, thus taxed again at death.
Farmers/Ranchers are hardest hit by this as they are land rich, and have been in the family for a generation or more, paying property and business taxes, over many years. When they pass on the children cannot cover the tax hit, thus have to sell off a portion of the property, if not all just to cover the tax bite.

Response by CDR Private RallyPoint Member made Apr 8 at 2016 2:41 PM

2016-04-08T14:41:57-04:00

Suppose your parents privately own a small business worth around $1 million because of a building, equipment, inventory, Etc. You work there too, but you are not an owner. They don't own a home and their other assets are not valuable because everything went into that business during their life. Suppose they die, and you inherit your parent's business. You are smacked with an inheritance and/or estate tax based on the value of the privately owned business. You don't have the money yourself to pay this tax, and your parents didn't have any other cash lying around. You can't afford to own it because of the tax. Your choices are to sell business assets to pay the tax (which affects the ability of the business to operate), sell the business to someone else who will become your boss in order to pay the tax, or close up shop. So, because of this tax, everyone at the business could lose their job. Does this sound like a good idea to you???

Response by SSG Private RallyPoint Member made Apr 8 at 2016 3:12 PM

2016-04-08T15:12:29-04:00

I know when it comes to farming this can be a disaster, when the father passes and leaves everything to the sons, sometimes the taxes can actually put them out of busines. Supposedly they have tried to fix this but, the tax is way to high in general.

Response by CPT Joseph K Murdock made Apr 8 at 2016 3:35 PM

2016-04-08T15:35:24-04:00

Many consider it double taxation.

Response by SSG Clayton Blackwell made Apr 8 at 2016 4:25 PM

2016-04-08T16:25:03-04:00

They shouldn't have to pay taxes on it because as you said, someone in their family worked very hard for it, already paid the government their taxes on it, and chose to them pass it on to their family. The government is double taxing the same property or monies.

Response by Lt Col Scott Shuttleworth made Apr 8 at 2016 5:00 PM

2016-04-08T17:00:46-04:00

I worked that land as a farm kid coming up to help pay those taxes. My parents mortgaged and paid off and mortgaged and paid off and so on to make crops and take care of their family. I nor my daughter when she gets it should have to pay a damn dime to the government because it was left to me. If I bought it outright, then that is different but if it was left to me in my family because they poured their blood sweat and tears into it, literally, then I shouldn't be punished for a gift.

Response by SGT Jerrold Pesz made Apr 8 at 2016 5:08 PM

2016-04-08T17:08:29-04:00

Because I already paid taxes on the money when I earned it. It is mine and I should be able to leave it to anybody that I want to.

Response by SFC Charles Temm made Apr 8 at 2016 5:22 PM

2016-04-08T17:22:20-04:00

They shouldn't exist. Whether one earned the money or inherited it, the government has no right to any of it.

Response by CPT Joseph K Murdock made Apr 8 at 2016 5:23 PM

2016-04-08T17:23:44-04:00

The exclusion amount or threshold is $5,450,000. I still feel sorry for those who have to liquidate their assets to pay off estate taxes.

Response by SFC William Adamek made Apr 8 at 2016 6:15 PM

2016-04-08T18:15:38-04:00

Before we die we sell everything, don't put any of the money into the bank, buy enough envelops to cover each relative that we want to receive something, divide cash into them, and right their names on the envelopes. Problem is I'm sure the tax people have enough little eyes to still catch this.

Response by MSgt John McGowan made Apr 8 at 2016 6:18 PM

2016-04-08T18:18:46-04:00

I do not agree with the tax. Twiced taxed is the word. I am trying to have a little something for my children but taxes may eat a lot up. The best way around that is gifting. You can gift $10000 per person each year. My only problen is gifting say some like a stock. Or even land. You do have to be careful if you are gifting your income.

Response by Cpl Mark McMiller made Apr 8 at 2016 8:13 PM

2016-04-08T20:13:20-04:00

PFC Al Sethre Because the deceased earned that money to give to his children and he/she already paid taxes on it. It really adversely effects farmers. A farmer's wealth is all tied up in their land, their farm, and their farming equipment. Many times a farmer will die and his family will lose that farm that they have had for generations because they don't have cash to pay the inheritance tax. The tax is immoral. BTW, I notice you're in Grand Forks, ND; I grew up there.

Response by SFC Joseph Dunphy made Apr 8 at 2016 8:37 PM

2016-04-08T20:37:03-04:00

The public policy issue is that people that inherit a large sum in essence have an unfair head start on the person who is born poor, but works hard and does the right thing. One example is the Rockefeller Family, which inherited great oil wealth. If there were no estate tax, the money would continue to work for them indefinitely, and the end result would be an aristocracy similar to that of France, for instance, at the time of the French Revolution. Current policy was designed to be rags to riches, then riches to rags, in three generations. The issue of income inequality has been highlighted recently in Thomas Picketty's book, Capital in the 21st Century, which shows how income inequality has widened greatly over many developed countries with tax systems. In that book, you willl get a more detailed explanation of why taxes are needed, and especially why fair taxes are needed, especially for democracies. The issue has become particularly heated in the last few days by the release of the "Panama Papers," which shows how the billionaires and multi-millionaires not only have great wealth, which is a given in some cases, but how they go to greath lengths to dodge taxes on top of their already great advantages. How this affects us, is thatabout $150 billion (with a B) per year are not paid in taxes just in the US. One direct consequence of that is that the US then has to go out and borrow money to make up for the loss, meaning higher taxes and/or fewer services for the US. The current military budget is one of downsizing, which means fewer soldiers, less equipment, and as the sergeant majors have noted, the switch to the new retirement system of less pay and benefits is a huge morale issue.

Response by SSG Trevor S. made Apr 8 at 2016 9:13 PM

2016-04-08T21:13:27-04:00

Because the money, property, and investments, have already been taxed.

Response by Maj John Bell made Apr 8 at 2016 9:35 PM

2016-04-08T21:35:09-04:00

They are immoral.

Response by LCDR Private RallyPoint Member made Apr 9 at 2016 6:14 AM

2016-04-09T06:14:58-04:00

All money is previously taxed; money your employers paid you came to them by some means and was taxed when that happened, and it will be taxed again when you spend it. So, the whole issue of "already been taxed" doesn't really make a lot of sense in reality. When a person gains money, someone pays a tax on that transaction one way or another. The fact that the "inheritance" tax only applies above a certain threshold is actually already quite reasonable, and contradictory to the way we're normally beholden to taxes.

Response by CDR Michael Goldschmidt made Oct 27 at 2016 9:53 PM

2016-10-27T21:53:13-04:00

Taxation is robbery. Next question.

Response by CWO3 Private RallyPoint Member made Mar 12 at 2018 1:48 PM

2018-03-12T13:48:09-04:00

It's double taxation, unless it has been otherwise sheltered and no taxes paid.

Response by SPC David Willis made Mar 12 at 2018 1:52 PM

2018-03-12T13:52:18-04:00

To be honest I'm not sure how I feel. On one side like you said the person inheriting the money has done nothing to earn it. On the other hand that money has usually been taxes already.

Response by SP5 Mark Kuzinski made Mar 12 at 2018 10:00 PM

2018-03-12T22:00:56-04:00

Just a few words on this - Inheritance taxes are BS!

Response by LTC Jason Mackay made Apr 7 at 2018 3:13 PM

2018-04-07T15:13:08-04:00

Disagree with death tax. One time transaction on something earned and taxed over and over.

Response by COL Private RallyPoint Member made Apr 7 at 2018 6:16 PM

2018-04-07T18:16:00-04:00

Inheritance tax doesn’t kick in until about 5 Mil. I don’t think I will have to worry much about that.

Response by COL Private RallyPoint Member made Apr 7 at 2018 6:22 PM

2018-04-07T18:22:03-04:00

I don’t think it will effect me so I don’t think about those things.

For 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax. A married couple will be able to shield just shy of $11 million ($10.98 million) from federal estate and gift taxes. The annual gift exclusion remains at $14,000 for 2017.

Response by SSG Gerhard S. made May 15 at 2019 8:57 PM

2019-05-15T20:57:23-04:00

The basic functioning premise of this question lies here. "Who's money is it? The money was earned, and the INCOME TAX was paid on that money when it was earned. If that money doesn't belong to the person who earned it at that point, then our whole system is a coercive farce. PFC Al Sethre at what point do you believe the fruits of a person's labor belong to them? If one's already taxed income, belongs to them, then it follows, it is THEIRS to do with, as they please. Whether they give it to charity, or to family members, or have it thrown into a big pile and burned, is their prerogative, and government shouldn't have a say, or a piece of it.

That being said, I don't think we should have an Income tax at all. We primarily, and generally funded our Federal government with low general tariffs until 1913 when Federal income taxes were generally enacted. Income taxed on persons, and on corporations punish production, and discourage savings. We should return to a general low tariff, and/or a sales tax to fund our government, both of which encourage production, and savings, also allowing individuals to determine their level of taxation based upon what they spend, and their level of savings the same way.

Just a few thoughts..... BTW, there's a plan for a Federal income tax. http://www.fairtax.org

Respectful regards.

Pass the FAIRtax | FAIRtax.org

FAIRtax.org | Pass the FAIRtax