Now onto something that gives me a bit of an irk from time to time....Estate Tax. Realistically its not something that will effect me for many years to come, so who knows why I'm about to gripe about it. If you haven't heard about it before, its essentially a tax on inheritance, although its also called a 'death tax'. Originally it was levied on the wealthy in this country, but over time it has grown to effect small business owners, farmers, and everyday people. The main reason it started to effect all of those people is simply the growth of the value of the dollar and all of a sudden a million dollar inheritance wasn't as much as it sounds.
This is the table of the tax over the course of the most recent years:
| Year | Exclusion Amount | Max/Top tax rate |
|---|---|---|
| 2001 | $675,000 | 55% |
| 2002 | $1 million | 50% |
| 2003 | $1 million | 49% |
| 2004 | $1.5 million | 48% |
| 2005 | $1.5 million | 47% |
| 2006 | $2 million | 46% |
| 2007 | $2 million | 45% |
| 2008 | $2 million | 45% |
| 2009 | $3.5 million | 45% |
| 2010 | repealed | 0% |
| 2011 | $1 million | 55% |
However, it looks like there is some effort to freeze the current levels moving forward. I'm not sure exactly where this sits on the priority level for Obama's first 100 days or maybe its not even within the first 100 days. I'm personally a bit surprised by the fact the democratic congress would choose to freeze them at the 2009 level, however, I am quite content with it. The $3.5 million exclusion is a per person basis, another words allowing a married couple to exclude $7 million in their estate from taxes. I think this is extremely reasonable. I'm a big subscriber of Warren Buffet's view of inheritance: "Leave enough to do anything, but not enough to do nothing."
I have a tremendous distate for laziness in society. Unfortunately, a large inheritance from one's parents, grandparents, uncles, etc allows for a great excuse to never lift a finger. This is by no means a rule amongst all individuals receiving inheritance, there are plenty that are capable of handling a large amount of money. I am not speaking to their ability to manage it, but more so the responsibility. You see, taking away someone's incentive to wake up in the morning, to make a life for themselves is robbing them of potential joy they will never understand. Money will never solve all of your problems yet there are a lot of people out there that don't know how to become happy or happier once they have all that money.
This leaves me to think that although $7 million is a high amount, its enough to get someone started, but not quite enough to do nothing. Money needs to flow from one source to another for the economy to work and as awful as it sounds to have to tax someone's life's work, it may just do their beneficiaries and the economy some good in the end.
1 comment:
Very impressed. I have a blog too, but understanding that no one is likely to read it, I use it as a repository of thoughts, an archive. One in a while I go back to it and see if what I wrote is still valid. Some of those thoughts have been published in local newspapers, even the NYTimes. But as far as estate tax, isn't this simply re-taxing money earned which was already taxed at time of income? Estate tax is BS. It si double taxation. Clear this up for me?
Post a Comment