Right, what's the point of building up an estate if you can't pass it along to your children?

If I were to somehow become rich, I'd set up my will so that Annabel and any future sibling would have enough money to get any education they wanted without going into debt, plus a little boost to get them started in life, but not so much that they'd never have to work a day in their lives. I'd leave the rest to nonprofits or to set up need-based scholarships at my alma mater.

And while that sounds all smug and virtuous, my main motive is "God forbid that Annabel should ever be a Paris Hilton."

Right, what's the point of building up an estate if you can't pass it along to your children?

Having a comfortable or even luxurious retirement. Maybe it's because my family has never had anything to pass on to the next generation, but don't see it as anything anyone shold want to do, or should have a fundamental right to do. It's just not obvious to me.

I don't get the "but the family business will go under if it's subject to the estate tax" argument. Incorporate, people, it's not hard or expensive.

Incidentally, Cindy mentioned something that's true-- an inter vivos trust is easy and pretty much avoids an estate tax. So this is kind of moot.

And this is why I don't understand why repealing the "death tax" has somehow become such an issue.

"God forbid that Annabel should ever be a Paris Hilton."

From what I've heard, Paris is earning herself a shitload of money, and without that, wouldn't be that rich for a rich kid.

I also think capital gains tax is wrong.

Why? Why should earned income be taxed more heavily or more consistently than other income?

If I've been paying taxes on my money all my life, and managed to invest what I could wisely, well goody for me. That stuff is mine. The money that bought it has already been taxed and I'm a damned broken record.

And you are not being taxed on it again. The recipients are being taxed on what is essentially new income to them. My employers were taxed on their income before they passed it along to me. I pay taxes on it. And if I had a housekeeper or nanny or other employee, they would be taxed on what I passed along to them.

There are provisions, such as the $1.5 mil threshold (which I agree should be a lot higher) that pay respect to the fact that passing your assets along to your kids is such a tradition, and so ingrained, and I don't have a problem with that. Same with the $250k/$500k exemption on gains from sale of your house. But at the end of the day, it's all income, and I think it should be taxed as such.

The real estate bubble that makes for $500K suburban homes at the moment is very receent indeed (curse it). The estate tax is clearly designed to hit the really wealthy; it's just that inflation has gotten ahead of the current limits.

(I believe my grandparents' estate invokes the estate tax, but if so, I am certain they would have liked it that way, because they were strong supporters of big government.)

My descendants are at least three generations away from worrying about inheritance.

If every single relative I have died tomorrow, I'd get bupkis. And I don't like the idea of waiting for people to die to get anything. It's kind of creepy.

And this is why I don't understand why repealing the "death tax" has somehow become such an issue.

Because the rhetoric around the death tax will soon make it harder to create an inter vivos trust without taxing it.

It's double dipping. ALL of the money will be taxed, once, either by income tax on the original investment or cap gains on the profit. An estate with unrealized gains can't be lived on (maybe in, if it's a house)-- no one is living large off of an estate with unrealized gains.

It's another bite at the apple, the same way that corporate tax simply places an extra tax on everything you consume, your wages or dividends.

inheritance has always been a default assumption of western culture, hasn't it?

Heh. At the moment, I'm looking at inheriting a whole lotta debt and not much else.

ETA: That was just a sidenote to the discussion. Don't have time right now to comment on the actual estate tax dilemma.

OK, I'm not an expert on the inheritance tax. So what really bugs me is that this is yet another tax cut that will only help the very wealthy (how many major tax cuts have there been in the last 5 years that have gone mostly to the wealthy? Four? Five? I've lost count). Also, I'm scared as to what's gonna happen with the huge budget deficits we're having and will continue to have for a long time, and repealing the estate tax will make things worse.