4 ms·

For ordinary people, sure. But the estate tax kicks in at anything above $11M, and is 40%.

DetroitThrow 5y ago
The estate tax in America has been called the voluntary tax for a reason - it's almost never paid on at the rate you quote by anyone who can do the leg work to set up legal entities which can make the effective tax rate 0% - which ends up being trivial for billionaires: https://archives.cjr.org/the_audit/bloomberg_waltons_how_billionaires_get_around_estate_tax.php https://archives.cjr.org/the_audit/bloomberg_waltons_how_bil... Even a quick Google search yields articles describing a (very incomplete) list of loopholes one can use to make the estate tax not something one has to "worry about": https://smartasset.com/taxes/5-ways-the-rich-can-avoid-the-estate-tax https://smartasset.com/taxes/5-ways-the-rich-can-avoid-the-e...
- aetherson 5y ago
  Perhaps, though all of those things have downsides and limitations. But the idea here is not defending all the intricacies of the US tax code. It's simply noting that the gloss of the article that somehow it's a giant scandal that unrealized cap gains aren't taxed is dumb.
- koheripbal 5y ago
  Which is why we need to curb these non-profit donations and trusts. The estate tax rate itself is fine - the issue is the exemptions.
- Supermancho 5y ago
  Ironically, when saying it's well know that the wealthy avoid taxes", gets downvoted in another thread. https://news.ycombinator.com/item?id=27090450 https://news.ycombinator.com/item?id=27090450
bradleyjg 5y ago
I love how in America everyone is middle class. $10 million estate—-that’s totally ordinary!
- humanrebar 5y ago
  If the lower bound on estate taxes are too low, certain kinds of capital intensive family businesses like farms take a big hit as they pass from generation to generation -- in a world where they generally have a net disadvantage to corporations already.
  - bradleyjg 5y ago
    I also love how the family farm remains a universal justification even as it’s almost entirely disappeared from American life. It’s similar to how every American child knows what a pig and cow sound like despite almost none of them having seen one. Our culture is funny. That aside, I’m not arguing for a lower estate tax threshold. I’m arguing for an elimination of the state up basis at death, at least for assets which the estate tax has not been paid. If Joe Farmer’s kids keep his $10 million farm, they won’t pay any taxes. But if they sell it, they ought to have the same basis as Joe would were he still alive.
    - DetroitThrow 5y ago
      Keep in mind, not even a couple dozen family farms have to pay any estate tax any given year, and that number is getting smaller: https://www.cbpp.org/research/federal-tax/the-federal-estate-tax https://www.cbpp.org/research/federal-tax/the-federal-estate...
    - ipaddr 5y ago
      I would say most kids have seen a pig or a cow either at a farm, driving past a farm or going to the zoo (zoos are a common experience for most average kids).
      - kingaillas 5y ago

The estate tax in America has been called the voluntary tax for a reason - it's almost never paid on at the rate you quote by anyone who can do the leg work to set up legal entities which can make the effective tax rate 0% - which ends up being trivial for billionaires: https://archives.cjr.org/the_audit/bloomberg_waltons_how_billionaires_get_around_estate_tax.php https://archives.cjr.org/the_audit/bloomberg_waltons_how_bil... Even a quick Google search yields articles describing a (very incomplete) list of loopholes one can use to make the estate tax not something one has to "worry about": https://smartasset.com/taxes/5-ways-the-rich-can-avoid-the-estate-tax https://smartasset.com/taxes/5-ways-the-rich-can-avoid-the-e...

aetherson 5y ago
Perhaps, though all of those things have downsides and limitations. But the idea here is not defending all the intricacies of the US tax code. It's simply noting that the gloss of the article that somehow it's a giant scandal that unrealized cap gains aren't taxed is dumb.
koheripbal 5y ago
Which is why we need to curb these non-profit donations and trusts. The estate tax rate itself is fine - the issue is the exemptions.
Supermancho 5y ago
Ironically, when saying it's well know that the wealthy avoid taxes", gets downvoted in another thread. https://news.ycombinator.com/item?id=27090450 https://news.ycombinator.com/item?id=27090450

bradleyjg 5y ago

I love how in America everyone is middle class. $10 million estate—-that’s totally ordinary!

humanrebar 5y ago
If the lower bound on estate taxes are too low, certain kinds of capital intensive family businesses like farms take a big hit as they pass from generation to generation -- in a world where they generally have a net disadvantage to corporations already.
- bradleyjg 5y ago
  I also love how the family farm remains a universal justification even as it’s almost entirely disappeared from American life. It’s similar to how every American child knows what a pig and cow sound like despite almost none of them having seen one. Our culture is funny. That aside, I’m not arguing for a lower estate tax threshold. I’m arguing for an elimination of the state up basis at death, at least for assets which the estate tax has not been paid. If Joe Farmer’s kids keep his $10 million farm, they won’t pay any taxes. But if they sell it, they ought to have the same basis as Joe would were he still alive.
  - DetroitThrow 5y ago
    Keep in mind, not even a couple dozen family farms have to pay any estate tax any given year, and that number is getting smaller: https://www.cbpp.org/research/federal-tax/the-federal-estate-tax https://www.cbpp.org/research/federal-tax/the-federal-estate...
  - ipaddr 5y ago
    I would say most kids have seen a pig or a cow either at a farm, driving past a farm or going to the zoo (zoos are a common experience for most average kids).
    - kingaillas 5y ago