Where I work, if an employee wins a $10 gift certificate in a "morale boosting ceremony" it's subject to tax. I know because I have to get the person's social security number and put it in the system, so it gets reported to the Feds.

Since I figure an inheritence is just a gift you get when the giver is beyond having a use for it, I'm not seeing the difference an estate tax makes, aside from lower exempted amounts for gifts from live folks.

Like I say, the gift only gets taxed once. You get to claim whatever the giver paid for it as the "basis", or basically the cost of the gift, and it's not taxable to you. But you would have to pay any capital gains if you ever sold it. An estate tax makes the entire fair market value of the estate taxable at transfer. So,

I give you a house while I'm alive. I paid $50,000 for it, now it's worth $400,000. OK, fine. When you sell it, (for 400K) you owe taxes on the gains realized, which is $350,000. That's ok, you can pay the money out of your gains, and that $50K investment is only taxed once.

I give you a house when I die. I paid $50,000 for it, now it's worth $400,000. You pay estate taxes on $400,000 now, and that $50K is taxed twice, by virtue of me dying.

Ha, flea. That's classic.

When I left a job years ago, the big boss decided to give me a nice bonus as a going away present, but didn't mention it to the accountant until after. So I got a round-number hand-written check, but then nearly all of my last paycheck was taken away by the taxes on the bonus check.

I give you a house when I die. I paid $50,000 for it, now it's worth $400,000. You pay estate taxes on $400,000 now.

'Cept it's under the 1 million (or whatever) limit, so you'd pay no taxes. Or am I missing something?

From Wired:

Polly Want a ... What?
If you need proof that we are all a product of our environment, look no further than Barney, a 5-year-old Macaw who swears like a lorry driver. Which figures, because Barney, who now resides at a sanctuary in central England, once belonged to a lorry driver. Although workers at Warwickshire Animal Sanctuary have tried to break Barney of his habit, the stream of invective continues. "He's told a lady mayoress to f... off and he told a lady vicar: 'And you can f... off as well,'" sanctuary worker Stacey Clark said. Barney didn't hold back when it came to a couple of visiting cops, either. "He told them: 'And you can f... off, you two wankers.'"

I think picking your nose at work should not be done.

I think picking your nose at work should not be done.

Whoa! That's quite a stand to take.

ION, a friend sent me this link to an edible books festival. Check out the gallery!

That's quite a stand to take.

I'm all about the controversial positions.

I wonder if I can prevent her from ever using my keyboard. Or phone.

Or air.

'Cept it's under the 1 million (or whatever) limit, so you'd pay no taxes. Or am I missing something?

I'm just pulling numbers out of the air to make the difference clear. Technically none of this is applicable now, because estate taxes are not operable. The thrust of the argument being that the current tax system-- that cap gains tax is paid when the gain is realized, not at the death of the donor-- is not some kind of scam that lets people get away with not paying taxes.

The figure I've seen for the estate tax revenue is $290 billion over the next 10 years. If the tax is repealed, then where does that money come from? Raise the income tax?, Cut Medicaid?, Just add it to the debt?

Where does that money come from (it's not coming now, there's no estate tax)? I'm not sure how to answer this. First, it will still be collected through the capital gains tax. Or through increasing top level income taxes, cutting expenses or increasing the deficit. I mean, I could just as well suggest increasing the effective tax rate on people who make between $300K to $350K, calculate how much that will get the government and then ask where that money will come from if it's not increased.