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wayne

There are several ways to categorize 'the rich' that are applicable to the estate (or death) tax, one of which is in terms of the way in which the assets that make them qualify as rich are held. Take two examples: one person whose assets are liquid (stock, bonds, etc.) and another whose assets are largely tied to a business (car dealer, farm, etc.) Estate planning for the former is much simpler than for the latter. The former has a variety of vehicles into which assets can be transferred, particularly if control of the particular assets is not of vital concern (owning 50,000 shares of Microsoft means you have a lot of money, but they're not going to put you on the board). The latter person is rather stuck (you don't want others to have a controlling share of your business, so the clever schemes advocated by the planner are likely to be of much less use. Thus, to pay the estate tax, the business will either have to be sold, or burdened with a large debt, neither of which is desired. Thus, different classes of 'rich' are treated differently, depending on their respective situations.

Ridding the tax code of the loopholes sounds like a great idea. Good luck.

Bill

I think the estate tax is a vistage of class warfare, the product of envy. The amount of revenue it generates is small. Notice that the proponents always talk about the "The Rich", as if it was okay to tax them since they have money.

Fundamentally it is wrong. It taxes the essence of productivity, savings and capital. The message is that if you create wealth, it will be taken when you are dead and put to use in places you would never have allowed when alive. The entire thing should be repealed. The loophole is that it doesn't apply to anyone with less than some amount. The message--don't get rich or you will be punished.

I will never pay estate tax and neither will my mother when she dies, but I resent bitterly the idea that somebody thinks they have the right to take what someone else spent their life creating, just because it it more than they think proper to have.

Douglas

The estate tax is also a giveaway to the insurance industry, which writes large numbers of policies for the sole purpose of paying the estate tax. So you have discovered yet another reason for getting rid of the estate tax forever.

wayne

Douglas is correct. The estate tax also generates revenues for tax planners, such as the guy who wrote the letter to the NYT. He thus had a personal financial motive for keeping the tax in place (and keeping the whole tax code as byzantine as it is).

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