aff estate tax

7/27/2019 AFF Estate Tax

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Not much exemption

Forbes, Ashlea Ebeling, May 6th 2010,

http://www.forbes.com/forbes/2010/0524/investing-gift-tabypass-trust-obama-estate-tax-limbo.html, October 3, 20

Under the crazy terms of the 2001 Bush tax cuts, the fedestate tax expired on Jan. 1, 2010 and then springs back

on Jan. 1, 2011, with only $1 million in assets exempt frostiff 55% levy on all assets not left to a spouse or charity.

http://www.forbes.com/forbes/2010/0524/investing-gift-tax-bypass-trust-obama-estate-tax-limbo.html






What an estate tax is, vs an inheritance tax

Dianne Reis, Attorney at lawCertified as an Elder Law Attorney

the National Elder Law Foundation. , No date available,http://willsandprobate.com/FAQ/inheritance-estate.htm , Oct

2011

An estate tax is a tax imposed on the deceased's estate as

whole. The executor fills out a single estate tax return andthe tax out of the estate's funds. The heirs will only be helliable for the tax if the executor fails to pay it.

http://www.nelf.org/yourlawy.htm


http://www.nelf.org/elderlaw.htm


http://www.nelf.org/



http://willsandprobate.com/FAQ/inheritance-estate.htm








No middle class (or below) will be taxed



2011

Every estate gets an estate tax deduction for all property receiv

the deceased's spouse, as well as a $5 million standard exemptiall other property. Thus, many middle class Americans will owfederal estate tax.
















Fed estate tax but no inheritance tax



2011

The federal government imposes an estate tax on all citizens an

residents of the United States. It imposes no inheritance tax.
















ET: Not cost effective.

Policy and taxation group, date unkown,

http://www.policyandtaxationgroup.com/html/faq2.

October 8, 2011

According to the Joint Economic Committee rep

dated December 1998, the cost to comply andcollect the tax is equal to the revenue raised.

http://www.policyandtaxationgroup.com/html/faq2.html




70% of U.S. pop wants it gone.



October 8, 2011

In national polls, focus groups and instant respo

sessions - 70% of respondents believe that the"Death Tax" should be repealed.





Family business succession with the death tax



October 8, 2011

How does the "Death Tax" affect the success

of the family business to future generations?More than 70% of family businesses do not survthe second generation. 87% do not make it to ththird generation.





Econ. Benefit of repealing the ET


http://www.policyandtaxationgroup.com/html/faq2.October 8, 2011

In a study done by The Center for the Study of Taxa

it was determined that if estate, gift and generation-skipping taxes had been repealed in 1971, by the ye1991 there would have been 262,000 more jobs, $4billion more in GDP and $398.6 billion more in capita





Double tax and highest tax rate

Policy and taxation group, “repeal estate tax”, Date unknown,

http://www.policyandtaxationgroup.com/html/repeal.html, October 8, 2011

Estate tax rates, which range from 41% to 47%, are substantia

higher than other tax rates - the lowest estate tax rate is almo

high as the highest income tax rate of 39.6%. Moreover, the etax is imposed on earnings and assets that have already been

subject to income, social security, and other taxes at the fede

state level.

http://www.policyandtaxationgroup.com/html/repeal.html

http://www.policyandtaxationgroup.com/html/todayest.html


http://www.policyandtaxationgroup.com/html/eliminate2.html









No incentive to hand business down to heirs.



Under the current tax system, it is cheaper to sell the fam

owned business before death rather than pass the busin

one's heirs. Growing business can not remain competitivtax regime that imposes rates as high as 47% upon the d

of the founder/owner.





We need to encourage small businesses.



Small business has long been recognized as the backbone of

America's economy - employing almost 60% of the workforce

creating about two-thirds of the new jobs in the U.S. since the1970's. Our tax laws should encourage rather than discourage

perpetuation of these businesses.





ET encourages consumption



With Americans living longer, we need to encourage

individuals/families to save and invest in order to plan for the

future. However, the estate tax creates a disincentive to save,instead, encourages consumption. The more assets one has at

death, the more he/she may have to pay to the federal govern

(death taxes).









ET has harmed the economy



The estate tax, which was intended to break up large concent

of wealth and promote economic opportunity, has instead be

a barrier to economic growth and job creation. This "disincengrowth" effect of the estate tax is equivalent to doubling inco

rates. (Tax Foundation)







… estate tax impedes economic growth…

A joint Economic committee study: Chairman Jim Saxton Repu

from New Jersey, Congress, May 2006,http://www.policyandtaxationgroup.com/pdf/JointEconComm

06.pdf, October 8, 2011

The estate tax impedes economic growth through high

compliance costs and economic inefficiencies, and has rethe stock of capital in the economy by approximately $84

billion.

http://www.policyandtaxationgroup.com/pdf/JointEconCommrpt5-06.pdf






Hinders self-employment and family run businesses




The estate tax hinders entry into self-employment and bre

up family-run businesses, many of which lack the liquidresources needed to meet their estate tax obligations. Thealso an impediment to upward income and wealth mobilit







…the tax exacerbates inequality.




Much research indicates that the estate tax is an ineffectiv

for fighting wealth and income inequality. In fact, someestimates indicate that the tax exacerbates inequality.







No impact on charity




The benefits of the charitable deduction are often overstat

with recent research indicating the tax has only a modest,any, impact on gifts to charity.







Repeal of estate tax will not result in revenue loss for fed. G




The estate tax clearly results in some losses in the federal in

tax, meaning that the true net revenue of the estate tax is lesthe official, static measures of its revenue yield. Although thexact magnitude of the effect is not known, some researchsuggests that repeal of the estate tax will not result in a revenloss for the federal government.







…deduction exerts only a modest, if any, stimulative effect.




Recent research indicates that the charitable deduction exert

a modest, if any, stimulative effect. In fact, the estate tax maactually be a significant barrier to charitable giving, as estatetaxes crowd out charitable bequests.







Hinders social mobility




Because the estate tax disrupts the transmission of family w

to succeeding generations, the estate tax hinders upward incmobility. One study estimates that the estate tax will consumto 13 percent of African-American wealth over the next 50 yWith the number of minority-run businesses surging in receyears, the estate tax will come to affect more and more such







The cost of the ET




A 2001 study found that approximately 2.6 million acres of

land must be harvested each year to pay for the estate tax.Another 1.3 million acres must be sold to raise funds to pay taxes, of which close to one-third (29 percent) is either deveor converted to other uses.







Ben F. quotes and the link




Benjamin Franklin observed over 200 years ago that “in this

world nothing can be said to be certain, except death and taxDeath and taxes may indeed be inevitable, but the simultaneconvergence of the two in the federal estate tax has produceof the most contentious components of the federal tax code.







The cost benefit mismatch




When the costs of the estate tax are paired with the benefits,

mismatch is easy to discern, with the costs far exceeding the benefits.







Liberal opinion of how unfair the ET is.

A joint Economic committee study quoting Henry Aaron and A

Munnell two prominent liberal economists: Chairman Jim SaxRepublican from New Jersey, Congress, May 2006,

http://www.policyandtaxationgroup.com/pdf/JointEconComm


“In short, the estate and gift taxes in the United States have to achieve their intended purposes. They raise little revenueimpose large excess burdens. They are unfair.”







Discourages work and savings in favor of conspicuousconsumption.


from New Jersey, Congress, May 2006,



First, the estate tax fails on liberal and progressive grounds because it discourages work and savings in favor of conspicconsumption.







low-income households have substantial amounts of wealth





Federal Reserve Bank of Minneapolis’ Quarterly Review foun

many low-income households have substantial amounts of weand vice versa. For example, the average wealth of the bottom percent of the income distribution is enough to place such ahousehold in the top wealth quintile.







Two negative impacts to the charity incentive of ET





Formal research into the impact of a reduction in estate taxes

generally finds that there are two opposite effects. First, there increase in the tax price of making a donation, which dampenstax benefits of giving. Second, there is an increase in the amouafter-tax wealth, which boosts giving by augmenting availableresources.





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