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Without prejudice as to whether or not it's a good thing, I think "death tax" is the more honest as it is charged at the cardinality of the people who performed

by efaref 9y ago

Without prejudice as to whether or not it's a good thing, I think "death tax" is the more honest as it is charged at the cardinality of the people who performed the action of "death", as opposed to the people who performed the action of "inheritance". If it really was an "inheritance" tax, then each person would have an "inheritance tax allowance", that is the amount they are allowed to inherit before the taxes start. So if 20 of my ancestors all kicked the bucket at once, each leaving me a modest fortune that adds up to a large total, then I would be liable for a hefty inheritance tax bill. Whereas, if great aunt Mabel died and left $1000 for each of her 1000 progeny, then no tax would be due, as surely a measly sum like $1000 would fall below any reasonable inheritance limit. The "death" or "estate" tax is levied on the value of the assets of the person who died, not on the value of the amount received by an individual who inherits. Ergo, it's a death tax.

ghouse 9y ago
I'm pretty sure it _is_ an inheritance tax. It's paid by the living, not by the estate of the dead. If you receive a gift of more than $22 million (in the US, after the new tax bill goes into effect), then you pay tax on it. Everything up to the $22 million is tax free. So, you could receive $22 million from your parents, $22 million from your aunt and uncle, and $22 million from your grandparents, leaving you with $66 million tax free.
- efaref 9y ago
  In the UK at least, it is paid by the executors of the estate as part of discharging the estate, so it's definitely an estate (or "death") tax. I would expect the same is true in the US, but happy to be corrected. Your reasoning about the allowances is backwards. If you lose a parent, an uncle and a grandparent all in one year, and get $22 million from each, then you have had a $66 million dollar "tax allowance". There's only one of you, but there are 3 deaths, so $22 million per death, ergo, a death tax. Conversely, if you work for 3 companies, you don't get to consider each income separately and pay only the bottom bracket of income tax for each of them; you pay the bracket that is appropriate for your total income, because it's an income tax, not a having-an-employee tax. (in the UK we also have a 'having-an-employee' tax, but that's handled separately).
  - ghouse 9y ago
    Sounds like the US and UK handle it differently.
- sandworm101 9y ago
  To loose that many wealthy relatives in a single year is a very special case. One would assume that the majority of cases would involve the death of married couples, which normally involve "all to spouse" wills, making an extremely rare case where a single person would inherit substantially from both. Small nitpick: It isn't a "gift of $22 million" but a bequest. If gifts of 22 million were allowed free of tax, then absolutely nobody would ever pay inheritance taxes. The current annual limit for non-taxable gifts is $15,000 per recipient. Wonder why wealthy US families like having lots of grandkids? Because each can receive 15K into their trust fund tax-free from each elderly relative per year. Amongst established families this is the primary means of moving money between generations. And if you are pregnant now, getting the baby born before Monday means a 15K bonus that it won't get if born on Tuesday.

by efaref 9y ago

ghouse 9y ago

I'm pretty sure it _is_ an inheritance tax. It's paid by the living, not by the estate of the dead. If you receive a gift of more than $22 million (in the US, after the new tax bill goes into effect), then you pay tax on it. Everything up to the $22 million is tax free. So, you could receive $22 million from your parents, $22 million from your aunt and uncle, and $22 million from your grandparents, leaving you with $66 million tax free.

efaref 9y ago
In the UK at least, it is paid by the executors of the estate as part of discharging the estate, so it's definitely an estate (or "death") tax. I would expect the same is true in the US, but happy to be corrected. Your reasoning about the allowances is backwards. If you lose a parent, an uncle and a grandparent all in one year, and get $22 million from each, then you have had a $66 million dollar "tax allowance". There's only one of you, but there are 3 deaths, so $22 million per death, ergo, a death tax. Conversely, if you work for 3 companies, you don't get to consider each income separately and pay only the bottom bracket of income tax for each of them; you pay the bracket that is appropriate for your total income, because it's an income tax, not a having-an-employee tax. (in the UK we also have a 'having-an-employee' tax, but that's handled separately).
- ghouse 9y ago
  Sounds like the US and UK handle it differently.
sandworm101 9y ago
To loose that many wealthy relatives in a single year is a very special case. One would assume that the majority of cases would involve the death of married couples, which normally involve "all to spouse" wills, making an extremely rare case where a single person would inherit substantially from both. Small nitpick: It isn't a "gift of $22 million" but a bequest. If gifts of 22 million were allowed free of tax, then absolutely nobody would ever pay inheritance taxes. The current annual limit for non-taxable gifts is $15,000 per recipient. Wonder why wealthy US families like having lots of grandkids? Because each can receive 15K into their trust fund tax-free from each elderly relative per year. Amongst established families this is the primary means of moving money between generations. And if you are pregnant now, getting the baby born before Monday means a 15K bonus that it won't get if born on Tuesday.