Talk:Estate tax in the United States

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Would it be worth having the article distinguish between a true Inheritance Tax in which the capital bequeathed is taxed on the beneficicary and an Estate Tax in which the tax is assessed on the estate of the deceased? Does any country operate a true Inheritance Tax in this sense, or are the technical difficulties such that all so-called Inheritance Taxes are really Estate Taxes serving as proxy Inheritance Taxes?

- Alan Peakall

There are, I believe, a few states in the US that do have an "inheritance tax" as syuch. However, the federal government and most states use an Estate Tax as you have described it. Ellsworth 16:10, 23 May 2004 (UTC)


This article needs to be distinguished from Estate Taxes because they are NOT the same thing at all. On the Federal level the U.S. has an estate tax, while many states have had and still have an inheritance tax. Also, for its applicability to the broader spectrum of other countries, this distinction should be made as well. Franklin Roosevelt wanted to install an inheritance tax on top of the Federal Estate Tax (http://www.treasury.gov/education/faq/taxes/historyrooseveltmessage.shtml)

One tax values the remaining estate, the other tax values the inheritance. One taxes the "giver" or bequether of the money, the other taxes the recipient. If this article is intended to be broad enough for global or world use, it needs to be broadened to allow for multi-cultural representation of taxation. Regards, Steve Stevenmitchell 14:39, 15 June 2006 (UTC)

In the United States, the distinction between "estate tax" and "inheritance tax" is not as clear as the above comments would suggest. The difference usually has to do with how the tax is calculated, and not how it is collected, or who collects it. For example:

1. Although it is sometimes said that an estate tax is imposed on the estate, while the inheritance tax is imposed on the beneficiary, the primary obligation to collect and pay the tax is always imposed on the personal representative of the estate (i.e., the executor or administrator). The beneficiary can be personally liable for the tax if the beneficiary receives property subject to tax that is outside of the control of the personal representative (such as life insurance, retirement benefits, or jointly owned property with rights of survivorship), but a beneficiary can be also be personally liable for estate taxes under similar circumstances.

2. To say that the tax is imposed on the beneficiary might suggest that suggest that an inheritance tax could be imposed by the state in which the beneficiary resides, rather than where the decedent was domiciled or the property was located, but that has never been done to my knowledge, and would probably violate the due process clause of the U.S. Constitution, given that the property is under the control of the state in which the decedent was domiciled (or the property was located) and the rights of inheritance are determined under the laws of the decedent's domicile (or where the property was located). (On at least two occasions, the US Supreme Court has held that the imposition of a state estate tax was unconstitutional where the tax was imposed on the value of tangible property outside of the state, finding that a state cannot tax property without having power over the property. See, Frick v. Pennsylvania, 268 U.S. 473 (1925); Treichler v. Wisconsin, 338 U.S. 251 (1949).) I suppose a state might impose a kind of "gross receipts" tax or "income tax" on the receipt of an inheritance by a beneficiary within the state, but I have never heard of a state imposing such a tax.

However, there can be differences between the ways in which estate taxes and inheritance taxes are calculated. An estate tax is usually calculated on the value of the entire estate, regardless of the identity of the beneficiaries (except for the allowance of marital and charitable deductions) or the number of beneficiaries. Inheritance taxes frequently have different tax rates for different classes of beneficiaries (so there might be different rates for lineal descendants versus "collateral" relatives such as cousins), sometimes have exemptions from tax for each beneficiary, and, when the tax rates are progressive, require a calculation of the tax on each separate share of the estate.

Dan Evans Evansdb 12:06, 11 January 2007 (UTC)

I'm going to merge this page with Death duty.

Contents

[edit] Style

I am neither a lawyer nor an accountant and had a tough time following this article. Can I suggest changing the formatting to conform to Wikipedia's guidelines for technical terms and definitions? Currently, many technical terms are put in "quotations" instead of being bold or italic. While the guide doesn't explicitly prohibit the use of quotation marks, font weight and obliqueness do a lot more to emphasize technical terms. RCanine 00:08, 5 March 2007 (UTC)

As with so many wikipedia articles, this one now suffers from over elaboration of nuance and trivia. It used to be much more succinct and direct, but wikipedia's format unfortunately never allows for an article to be 'done'. Encyclopedia articles are traditionally summaries, not endlessly changing exhaustive diatribes on minutia. Fallout11 11:24, 5 March 2007 (UTC)


[edit] The Part Slamming a "Republican Pollster" is Wrong and Out of Place

This tax was called, in common parlance, "the death tax" many, many decades before Frank Luntz was even alive. Following up that inaccuracy with the viewpoint of some "progressive" merely underscores the leftist tone of this article. Let me be clear: This article should be ideologically neutral, not biased toward the Left (as it now is) or toward the Right. —Preceding unsigned comment added by 70.44.144.184 (talk) 13:59, 23 April 2008 (UTC)


[edit] Life Insurance (US only)

I made a correction in the US part of the article to an edit about life insurance. Life insurance can be included as part of the estate for US estate tax purposes. See 26 U.S. Code 2042.

Life insurance payable to the executor, presumably as compensation for serving as executor is taxable.
Life insurances paid to beneficiaries generally are NOT taxable unless the deceased had significant reversionary interest, or control over the insurance proceeds.
I would guess that most policies are written to have specific beneficiaries rather than "payable to the estate of" due to the taxability of policies payable to the estate. User:Unfocused 05:36, 9 November 2006 (UTC)

As most policies still permit the purchaser to change beneficiaries (a reversionary interest), the non-taxability of most life insurance proceeds must stem from the fact that few estates exceed $2M dollars, even when the insurance proceeds are included.

This whole topic is explained much better below by Famspear. Unfocused 17:46, 9 November 2006 (UTC)

[edit] Tax Rate Effect

This section seems to me to be incorrect in its assesment of taxes. I do not believe it to accurate, but without more information, I don't feel comfortable deleting or correcting it. Are there any tax experts out there? Is this some sort of propaganda?

[edit] Circular Redirects

Under the section on the United States, there's a reference to the state estate tax, and a comment (See state estate tax.) However this page redirects to Estate tax, which redirects to the Inheritance Tax page... I'm not sure exactly what should be done to fix this according to standing policy.

[edit] Bequest

I am the author of the current draft of the UK Inheritance Tax page, and I am only here adding a link.

However the introduction to this article contains the following: "a form of tax levied upon the bequest that a person may make in their will to a living person or organisation"

I think someone with USA law experience might consider the following two problems which my UK-law-trained-mind has with that sentence:

  1. saying that estate tax is levied on bequests in wills implies that if assets pass outside your will (e.g. on intestacy) there is no tax.
  2. strictly, a "bequest" is a gift of PERSONALTY, so the sentence is only correct if (surely not!) REALTY is tax-exempt. (You "devise" realty.) AndyJones 12:29, 7 October 2005 (UTC)
Thanks for pointing that out, it was pretty poorly worded. I fixed that, but may have introduced other problems. I chose to make it say estate, and not just assets, because debts tend to be netted out in the absence of an exception. I'm not an attorney, but am pretty familiar with the US estate tax. Now that there is a separate article for the UK estate tax, all the US details should probably get moved to United States Inheritance tax or probably United States Estate Tax, and this article should be redone to be general about different types in different systems with only a small summary of the UK, US, and other specific systems. - Taxman Talk 13:23, 7 October 2005 (UTC)
  • I agree with you, but I think it's best if I step back and don't get involved. Incidentally, am I right to understand that on your side of the pond you actually call it "estate tax" (not "inheritance tax" as we do)? If yes, perhaps this article should redirect to "Estate Tax" rather than, as now, "Estate Tax" redirecting here. AndyJones 14:06, 7 October 2005 (UTC)

If I am remember correctly from my "Estate and Gift Tax" class, an Inheritance Tax is fundamentally different from an Estate Tax. An Estate Tax is assesed against the estate, hence the name. The amount of the tax is derived from the estate's value (obviously, this is a very simplified explanation). The repesentative of the estate would be in charge of making sure the tax is paid, including liquidation of assets in the event there is not enough cash to pay the tax. An Inheritance Tax, on the other hand, is assesed against the one inheriting the property, and the amount is sometimes determined by the degree of relationship the person was to the decedent (I say "sometimes" because I believe that there are states (in the U.S., anyways) which assess an inheritance tax without using a "degree of relationship" formula). While I am not 100% positive regarding the above statement (I will double check to make sure), I am fairly certain that it is. Therefore, in answer to AndyJones' question, we do call it the "Estate Tax" when we are referring to the Federal Tax System of wealth transfer, but we still use the term "Inheritance Tax" for some states' transfer tax systems (For example, Michigan used to have an Inheritance Tax, but this was abolished, I believe, a couple of years ago). Therefore, assuming I am correct, I believe that this article should be changed to account for this very subtle, but substantively real difference in the two forms of tax. Also, regarding the above correction of "bequest" and "devise", while AndyJones is certainly correct in pointing out that there is a difference at common law between the two terms, the Uniform Probate Code (which many U.S. states have either adopted wholesale or have adopted a majority of the proposals) has dropped the distinction and now merely uses the word "devise" for the willed transfer of either personal or real property (As an example, Michigan uses the word "devise" for both real and personal property, and does not recognize a distintion between a "bequest" or a "devise"). While I personally like using the word "bequest" when talking about willed personal property, and "devise" when referring to willed real property, my preference is not shared by the majority of the Estate Planning legal community. I am unsure as to whther any state still makes the distinction. This has nothing to do really with the article itself, but I just wanted to give you the FYI on that bit. - T.J. Swartz

[edit] Why is article US-Centric?

There is a UK-specific page. Shouldn't the US tax law regarding the Estate Tax (really a duty) be on its own page also? This page should just have general information about inheritance and estate taxes/duties. Jaysbro 23:03, 27 April 2006 (UTC)

Agreed. Either this page ought to contain general information only, with jurisdiction-specific information on other pages, or this page ought to contain information on all jurisdictions people care to discuss. (I'd prefer the former). To have an article on "Inheritance Tax" go in depth on US Law in particular seems an anomoly. Crebbin 20:01, 14 June 2006 (UTC)
I think everyone agrees with that, it's just that few people know much about cross jurisdiction information, and/or no one has made the fix yet. It might as well be you. Probably it's best to move out the US specific stuff and only leave what could be general to all. - Taxman Talk 21:50, 14 June 2006 (UTC)
I agree (as noted above) that this article should be separate from an Estate Tax article and should not be so "country-specific" unless it is meant to have separate sections for the applicable countries. Stevenmitchell 14:45, 15 June 2006 (UTC)
I think the problem with a centralised page is that someone with genuine cross-border knowledge would have to write it from scratch. I think I've got a solution, though: why not move this page to Estate tax (United States) (or USA estate tax, or whatever) then turn Inheritance tax into a dab? What do you think?
Here's my first thoughts on how that page might look:
"Estate tax" and "death duty" redirect here.

Inheritance tax or estate tax is the name given to various taxes which arise on the death of an individual.

In some jurisdictions, such taxes are known as "inheritance tax":

  • Inheritance tax (United Kingdom
  • Others?

In some jurisdictions the term used is "estate tax":

In some jurisdictions the term used is "death duty":

  • Bet there's no pages for this section, but prepared to be proved wrong otherwise the layout will be similar to stamp duty, below.

In some jurisdictions, death generates a charge to "Stamp duty", including Bermuda, Others?.

In some jurisdictions, death gives rise to a charge to Capital gains tax:

  • Capital gains tax (Canada)
  • Others?

Finally some jurisdictions have never had inheritance taxes, or have abolished them, including Australia.

This page is a modified disambiguation page.

—The preceding unsigned comment was added by AndyJones (talk • contribs) .

For what it's worth, I like the disambig idea. I'll help out if you want any help. - Jersyko·talk 16:23, 19 June 2006 (UTC)

I also like the move and disambig. Then people can expand it as information is researched/known, etc. I think the disambig would have to be copied and exist at both Estate tax and Inheritance tax. I don't really see a way around that. Redirecting to a disambig is not a good idea. - Taxman Talk 18:24, 19 June 2006 (UTC)
Jeez, I didn't want people to like the idea, now I have to do the work! Two things, though, before I do:
  1. Somebody, ideally an American, please tell me what you think the best name is for the USA Estate Tax article.
  2. Taxman, can you give me a the REASON for your view that a redirect to a dab is bad? If there are sound reasons then I'll run with them, but it's obviously easier to maintain one article, and for future editors to change it, so that's what I'd rather do. AndyJones 18:38, 21 June 2006 (UTC)
The US estate tax article should be titled Estate tax (United States). This is the SOP for law articles, as seen here, for example. - Jersyko·talk 18:53, 21 June 2006 (UTC)

Agreed. How about I suggest a fix (e.g making this something more akin to the main page of Age of Consent, which describes the basic concept and then links to pages that subdivide it into regions, e.g. "Europe", "South America", etc. ) over at WikiProject Law? :) Runa27 20:01, 22 June 2006 (UTC)

I'm back from a wiki-break, and I intend to start on my suggestion above, today or tomorrow. Any further misgivings or comments? Can anyone address Taxman's point above? (If no, I guess I'll just do what I think is right & someone can clean up behind me, but that's probably not ideal.) AndyJones 13:13, 3 July 2006 (UTC)
OK, have started on that. Two things TO DO on the new page now:
  1. Going through "what links here - a lot, frankly", to check if redrection is needed.
  2. Going through the main jurisdictions and classifying them according the the criteria on the new page. The PWC website will be a good source. AndyJones 13:08, 4 July 2006 (UTC)

[edit] Tax Avoidance

I have inserted a tax avoidance section. There is a huge industry out there that assist taxpayers in tax planning to avoid paying inheritance/estate tax. I have linked to a few services. It is not spam, it is simply an identification that there are estate planning services available to minimize tax liabilities.--Jbpo 20:18, 24 June 2006 (UTC)

  • If this section is to stay, it needs to be written in an encylopedic way. It will keep getting reverted as spam if it remains this spammy. AndyJones 18:50, 25 June 2006 (UTC)

Why is it spammy? It is just stating the fact that there are professional services firms out there that support tax avoidance? Please add your encylopedic edit rather than cut.--Jbpo 14:58, 26 June 2006 (UTC)

[edit] Revenue

Estate taxes contribute $70 billion per year to America's $2.119 trillion budget. Unsolicited 13:38, 4 July 2006 (UTC)

Does that number gel with the current revenue received by the federal government from the estate tax, or is it calculated based on past levels of revenue? Obviously, with the tax shrinking yearly, you would expect the number to decrease through 2010 . . . · j·e·r·s·y·k·o talk · 14:47, 4 July 2006 (UTC)

[edit] Opposition in U.S.

Two points:

  1. Opponents (not supporters) call the estate tax a "death tax".
  2. There's been bipartisan legislative efforts to repeal or reform the estate tax in the House of Representatives:
    • "After the Senate failed to repeal the estate tax by three votes, Senate Majority Leader Bill Frist (R-TN) suggested that the House should draft an estate tax relief bill. In response to this request by Sen. Frist, House Ways and Means Chair Bill Thomas (R-CA) drafted the Permanent Estate Tax Relief Act of 2006 (H.R. 5638)." [1]

What's the best place in the article to describe opposition efforts (not just arguments)? --Wing Nut 18:59, 29 June 2006 (UTC)

Hopefully, the best place to do that will be in a new Estate tax (United States) article. See the discussion 2 sections above. I think there can be a section on legislative back-and-forth in that article.
I wouldn't call it a "bipartisan" bill, though, as this is still mostly a Republican effort and is hardly different from a mere repeal of the estate tax (the article you reference says as much). I've read that the effort is actually merely an attempt to get some Northwestern Dems to vote for it because it includes something about reducing taxes on logging.[2] All that to say, "bipartisan" and even "compromise bill" are not accurate descriptors, imo. · j·e·r·s·y·k·o talk · 19:11, 29 June 2006 (UTC)

Okay, I won't call it bipartisan. Perhaps it would be more accurate to call it a Republican bill which is likely to be acceptable to Democrats. Unless there's going to be a close vote in the Senate, split along party lines. --Wing Nut 19:23, 29 June 2006 (UTC)

Yeah, I expect it be a party-line vote. We're talking about potentially 4 Senate Dems switching on this, and 4 seems overly optimistic from a Republican perspective, I think (though it would be enough for the bill to pass). · j·e·r·s·y·k·o talk · 19:27, 29 June 2006 (UTC)

Breaking news:

  • The estate tax reform bill passed on a 269-156 vote after contentious debate. Democrats, angry that their proposed increase in the minimum wage was blocked from floor consideration, forced a discussion. Republicans were forced to fight back several parliamentary motions and inquiries that led to two unnecessary votes on the House floor before the measure passed.
  • The bill would exempt any estate worth less than $5 million per person from federal taxation and make it easier for husbands and wives to pass on their assets with that exemption to a spouse upon their death. The $5 million exemption also would be indexed to cover the cost of inflation.
  • Estates worth $5 million to $25 million would be taxed at the current capital gains rate of 15 percent, and any estate worth more than $25 million would be taxed at a rate of 30 percent. [3]

Should we have an article on the bill, or just wait until (and if) the Senate passes it and just summarize its provisions then? --Wing Nut 22:08, 29 June 2006 (UTC)

  • The former. We can tag it and revise it once the bill passes the Senate. Nathanpatterson 14:23, 2 July 2006 (UTC)


Exemptions and Tax Rates: Note that the table contradicts the last sentence of this section. Sentence says that lower tax rate of 45% continues. Table says that the rate reverts to 55% in 2011. 7/21/06 Iowan

[edit] Intro

Will someone PLEASE clean up the opening two sentences:

"Estate tax is one part of the Unified Gift and Estate Tax system is a form of tax imposed in the United States upon the transfer of the property. The estate is imposed on the decedent's estate."

This kind of grammar does not exactly inspire confidence in the quality of the article to follow. (Reluclant to do this myself because it's not totally clear what it's meant to say.) AndyJones 08:10, 3 August 2006 (UTC)

Speaking of intro, it italicizes Unified Gift and Estate Tax as if that is the official name. I'm not sure that's the official name, and not sure it helps to have the name there anyway since they're not unified anymore. EGTRRA solved that. The gift tax, estate tax, and GSTT exclusions are no longer all the same. - Taxman Talk 21:00, 3 August 2006 (UTC)

[edit] Disputed sentence

I removed the following sentence: Under this argument, the estate tax can effectively limit the value of a small business: It can create incentives to abandon or reduce a profitable enterprise (or accelerate the timing of such decisions), in favor of asset protection or (in extreme cases) contribution to politically popular causes, or even simple profligacy. I left its source: [4].

I removed the sentence because when I read the source, I failed to find the following words or phrases: "limit the value", "abandon", "profitable", "enterprise" (except as a part of the name of an institute), "extreme", "popular", and "causes". I found "politically" once, in a different context, and "contribution" three times, again in a different context. In short, if the argument made by this sentence is in the cited source, it's worded completely differently. That different (actual) wording is what belongs in the wikipedia article, if it exists. Or nothing at all. John Broughton 21:05, 3 August 2006 (UTC)

This is a common tactic by User:Jbpo and his/her socks: cite a source in "support" of the blurb Jbpo adds to the article, but the source doesn't actually say what Jpbo says it does. See, for instance, Talk:Barack Obama#Immigration Reform. All that to say, I'm not surprised. · j·e·r·s·y·k·o talk · 21:24, 3 August 2006 (UTC)
Sorry, looks like this particular problem was my doing. I was attempting to clarify some of the explanation, preserving much of the text that was already there. The (previously-cited) source indeed did not match the phrases I used, because I was NOT attempting explicitly to restate the text found in the source – but rather to clarify the argument being made. No doubt I should have moved the source citation to the applicable text (though I had presumed it was intended as a reference to a general discussion on this particular topic). I'm afraid I am still unclear (in a cooperatively-edited document) on exactly what relationship needs to exist between a cited source and the text to which it is attached – and also the use of references in general. I believe I know how to use citations in a document which I author, and how to write verifiable encyclopaedic material, but I apologize for not yet quite grasping the Wiki model for cases like this. For what it's worth, when I performed my edit that led to this sentence being deleted, I tried to retain the gist of what was there previously...but I thought that "contributing to politically popular causes" was a relatively unimportant consequence of the estate tax. However it seemed manifest that a tax structure as described here could indeed change the timing of investment or liquidation decisions, and that was the point I was trying to highlight. Anyway, sorry if I muddied the water. Trevor Hanson 22:27, 3 August 2006 (UTC)
So John Broughton, did you actually read the Heritage Foundations sources, or just try to word match? If all you want to do is word match, there is not much need for Wikipedia (or any Encyclopedia) for that matter, as all information is already written, just waiting to be copied to other sections of the internet. It is quite obvious that a 55% tax rate creates a disincentive to invest in an enterprise. The Heritage Foundation, Club For Growth, and basic Arithmetic shows this time and time again. Yet, you have decided, for some unknown reason, to search for phrases that can be repeated from the Heritage Foudnation article cited. How about reading it first, then using adult logic skills to make a sentence or two summary of the disincentives to invest at 55% tax rates vs. 15% tax rates on capital gains, or total avoidance by using tax shifting schemes?--Jbpo 23:59, 3 August 2006 (UTC)
Jersyko continues his methods of editting entries he does not like and slandering those that dare to dispute his POV laden entries. I question why he bothers to contribute to a community resource such as a Wiki rather than just writing his own dictionary where terms he likes take on the definitions he wants, much like the Queen of Hearts in Lewis Carrol's Alice in Wonderland. If Jersyko would bother to read the Heritage Foundation entry, or do any research whatsoever on the topics he posts on, given the minimum of logic, he could make the connection between my original entry and the source cited. Rather he continues his disinformation campaign to make Wikipedia into his personal set of definitions, rather than a community based encyclopedic resource in defiance of the rules of Wikipedia and common sense.
This is argumentative entry. For the life of me, if the points are disputable, then dispute them. But do not edit them out to suit your point of view. That is why the heading is "Arguments" rather than Jersyko's views on the subject. I think he has reached a point where his entries are disurptive and disinformative to the nature and goodwill of the editors of this and many other entries. If there is a dispute in argument, then put it on the other side of the argument rather than censorring the parts you disagree with. --Jbpo 23:51, 3 August 2006 (UTC)
Trevor, if you just want to match phrases, can you please do that outside of Wikipedia? Rather can you use adult logic skills to make summaries, and connections between source materials and encyclopedic entries, and maybe do some research yourself to back up some rather obvious accounting notions.--Jbpo 00:02, 4 August 2006 (UTC)
Applauding the editors! Reading through this entry again, the paragraph says nearly exactly the same thing I typed about a month ago, albeit in more verbose and convoluted fashion. If convolution is the key to harmony on Wikipedia, then I applaud the convultion, and suggest that all entries be translated to Double Dutch then back to English before publication.--Jbpo 00:10, 4 August 2006 (UTC)
You've easily crossed the no personal attacks line. Though I've put up with this in the past when your comments were directly solely at me, now you're going after two other users as well. Keep it up and I'll be glad to report this behavior. · j·e·r·s·y·k·o talk · 00:13, 4 August 2006 (UTC)
If you feel my behavior is truly disruptive and disinformative, please feel free to file a grievance with the administrators here or file an RFC on my conduct. May I make a suggestion, though? Perhaps you should consider that the evidence is not in your favor, nor has it been in any other article on which we have interacted. For example, John Broughton, in his post above, demonstrates that the reference you posted does not directly support the assertion made. Perhaps there are other references that support the assertion, I'm sure there are. However, the fact that you chose this reference to support the claim is, at best, dubious. I'm fine with including the argument provided that it is properly sourced and presented in a NPOV manner. · j·e·r·s·y·k·o talk · 00:13, 4 August 2006 (UTC)
And you Jersyko easily crossed the no personal attacks line with your "common tactics" screed above. Why is it when you violate every principle of Wiki you seem to think this is acceptable, but when someone pushes back you claim some type of divine immunity? One might think you would consider apoligizing for your statement first, then proceed to fix the issues. Though I've put with this in the past, keep it up and I'll be glad to report your behavior. --24.13.84.218 00:55, 4 August 2006 (UTC) The above paragraph is mine--Jbpo 01:08, 4 August 2006 (UTC)

I have no idea what you're telling me to do here (someone else was matching phrases, not I). I had thought my occasional edits were helping to create a better document; but perhaps not. FWIW, I saw the material under Arguments against as a summary of conceptual issues, one likely to contain obvious points, and not as a deep accounting topic. (At any rate, I didn't think that encouraging charitable contributions was the key mechanism to stress.) I have no desire to fuel a flame war, so I will drop out of this exchange. Have fun, gents. Trevor Hanson 02:37, 4 August 2006 (UTC)

Trevor, your edits were fine, it is your piling on to the argument that unless phrases are matched, then the statement is false, that discouraged me. Please go on with your edits, but do not condemn mine out of hand, as the reference on the Heritage Foundation site is pretty good, and the logic of charities (and offshoring) being a politically favored cause is readily apparent in the tax code and in the documentation. I apologize if I discouraged your edits in any way.--Jbpo 02:48, 4 August 2006 (UTC)

[edit] Disputed sentence, take two

Jbpo said: Yet, you have decided, for some unknown reason, to search for phrases that can be repeated from the Heritage Foudnation article cited. How about reading it first, then using adult logic skills to make a sentence or two summary of the disincentives to invest at 55% tax rates vs. 15% tax rates on capital gains, or total avoidance by using tax shifting schemes.

No, I searched for eight WORDS and only one phrase. In the source, I didn't find the WORDS that were used in the sentence I removed. You used "logic" to create a "summary", yet you used WORDS that weren't even in the article - in fact, MOST of the (non-trivial) words in the (original) sentence (that you added) were NOT in the article. Exactly how does a source SUPPORT a sentence when most of the WORDS in the sentence aren't in the source? Or, to put it differently, exactly how would an objective editor distinguish between something that was simply MADE UP, and something that is supported by a source, if an editor (like you) has (as you seem to say) the right to essentially write a sentence that isn't in the source at all?
In short, you seem to think that if you can't point to one or a few sentences in a source to support the text you added, then your addition is STILL okay unless another editor can convince you that your summary/logical analysis of the source (which resulted in what you wrote) should be changed. You're wrong. The burden of proof for justifying the addition of text is on the editor who added it. And that burden is to point to where in a source that text came from. Of course, some of the words in the source can have been changed for consistency or clarity or brevity, sentences combined, etc. - things that fall into the realm of copyediting. But what you are claiming is that you can take a source and create, more or less out of whole cloth, what YOU think is a fair summary. That's BOGUS, because there is no way the sentence is easily verifiable. John Broughton 13:10, 4 August 2006 (UTC)
Yes, it is a summary of several arguments pointed out in the Heritage articles. It is not a text copy of someone else's research, but it is fully supported by documentation at Heritage and Club for Growth, two partisan organizations well suited for an arguments section. I do have the right to summarize, rephrase, shorten to fit into an encylopedia entry. Regardless of your Wikilawyering ("burden of proof"?), the current edit is just fine, and while more verbose, it is a legitimate restatement of my original post. --Jbpo 14:39, 4 August 2006 (UTC)
Okay, let's leave the article as is (in the paragraph under discussion), and the arguments as is, as well. John Broughton 15:37, 4 August 2006 (UTC)

[edit] Removed commentary, need legal expertise

I removed the following from the original article, as it was clearly presented as a comment. There are, however, some information in this section that is probably encyclopedic and may help readers. I am not a legal expert, and would appreciate someone who is to help rephrase the following section in such a way that it appears academic, rather than colloquial.

===2010, the year of no estate tax===
Comments have been made about the incentive for potential heirs to kill old or hospitalized sick people in the 2010 year before the estate tax reappears in 2011. This ignores two things. First, this idea itself may spur Congress into removing this one year treatment by either permanently raising the exemption in lieu of repeal or replacing the estate tax permanently with a pre-death recognition of very long term gains on highly appreciated assets, especially publicly traded stock. Secondly, with repeal taxpayers would need to know the tax basis of their property. The current rule of stepped-up basis makes the tax basis of an asset, the date of death value (subject to some modifications). Without the estate tax, no stepped up basis and we have would have a capital gains tax liability in lieu.

(71.102.133.145 02:37, 16 September 2006 (UTC))

[edit] Someone Please Note Underlying Assumptions

After reading the article and a couple of the external sites, I can see that a couple points are not made clear in the Estate tax (United States) article. I think they belong in the Arguments section, but I doubt my ability to add them in a NPOV manner, so I would like someone else to add them (guess I'm not so Bold today). (I'm going to sign each paragraph, as there are several paragraphs.) Kilyle 01:53, 7 November 2006 (UTC)

Back in business class, our professor tried to help us figure out the basic assumption of Capitalism, which was so near and dear to our hearts that not one of us could figure it out: A person has a right to own personal property. Now, I don't understand Socialism enough to appropriately state their arguments, but so far as I do understand it, one of the underlying assumptions is: Money is inherently the property of Society, and the individual has no right to use it as he pleases, especially if he has a lot of it. But Capitalism says: Whatever money I make is mine to use as I choose. Obviously, this fundamental distinction is vital to any discussion of economic policy, especially when that discussion dips into a discussion of obligations or moral stances. And in that Wikipedia is a world resource, any underlying assumptions should be made clear whenever a significant number of people are likely to disagree with them. The Estate Tax debate, as presented in the current article, rests on the the distinction between Capitalism and (I think) Socialism, yet no mention is made of either. Kilyle 01:53, 7 November 2006 (UTC)

One argument stated is that the estate tax "encourages charitable giving." This it does by effectively penalizing you if you choose any other option. Thus, this argument accepts as fact that those who don't give freely should be forced to give. Not only does this negate the potential moral value of giving, it rests on the underlying assumptions of Socialism—not Capitalism. Kilyle 01:53, 7 November 2006 (UTC)

Another argument is that the estate tax does not "disincentivize work." This is interesting, so let me see if I have my math right. A man with an estate of 100 million dollars above the exemption (say 101 million, or 102.5 million, or whatever) pays 45 million dollars in taxes. I don't much care how he made his money (investment, invention, Hollywood blockbusters, basketball sponsorships); the United States is still (ostensibly) a Capitalist system, and the underlying assumption as he made his money was that he could use it as he pleased, including giving it to whomever he pleased, most likely his children and grandchildren. Yet almost half the time he spent making that money, he was earning it directly for the government! I can't see how people would get excited at the idea of spending five months out of every year making money they can't use for their own long-term purposes. Kilyle 01:53, 7 November 2006 (UTC)

One of the external links has several quotes of interest. I wonder if they speak for the majority of estate tax supporters? They can't see how many people could object to the estate tax, since "it was a tax that so obviously took from the relatively few to relieve the burden on the very many" (Socialism). According to them, to "allow individuals to hold onto their money and do with it what they like" is "not particularly fair" because "many people will end up with less than they need and perhaps than they deserve" (Socialism). And the estate tax "rested on the principle that the wealthy few, if they were not willing to bequeath their money to charity, should not be permitted to pass it all directly to their heirs" (Socialism). All of these start with the underlying assumption that money is the property of society, not of the individual. Capitalism says "free to buy, free to sell, free to try, free to fail"; this site takes as a given that those who fail must be lifted up by those who succeed, and if those who have earned much do not care to give to those who have earned little, they must be forced to. Kilyle 01:53, 7 November 2006 (UTC)

To paraphrase the argument: Those who make large amounts of money have two options, giving it to charity or using it on themselves during their lifetime; if they choose any other option, the government should take part of it away to redistribute how it sees fit. That is, it is proper for a person to make money for the sole purpose of donating it to strangers, but it is improper for him to make money for the sole purpose of giving it to his children and grandchildren. (I'm amused that the external article calls this a "progressive" idea.) Again, this is obviously not Capitalistic reasoning, but Socialistic reasoning. It doesn't matter which position ultimately has the moral upper hand: The underlying assumptions of these arguments must be pointed out. Kilyle 01:53, 7 November 2006 (UTC)

I'm not here to make policy argument, but the reason some jurisdictions call this your "death dues" also explains why so many think this is just: Surely most wealthy people could not become nor stay wealthy without the structure and order provided by a society at large around them. Have a look at any African dictatorship and you'll see that no matter how skilled, no one gets wealthy unless they're one of the very few in good graces with the dictator. The wealthiest will always benefit more than lower economic classes from enforcement of law and order. Is it Socialist to have a stable society instead of anarchy?
It is not necessarily Socialist, although current Republican partisans would like you to think there is no other possible answer. Estate taxes are merely a deferred obligation that only comes due only when you personally have no further use for the capital. Society at large has invested greatly in your capitalistic rights, upon death you pay dividends back to society. If you were truly 100% Capitalist, you'd be paying for your own security forces, either bartering or printing your own currency, keeping your own standing army, maintaining your own roads, educating yourself, et. al. almost ad infinitum. Unfocused 18:06, 9 November 2006 (UTC)

[edit] Policies payable to specific beneficiaries

Dear fellow editors: I removed the following verbiage:

However, most policies are payable to specific beneficiaries rather than the decedent's estate.

The above statement is a correct statement. However, the statement is beside the point. The editor who inserted it seemed to think that merely making an insurance policy payable to a specific beneficiary would exclude the proceeds of the policy from the gross estate of the decedent for Federal estate tax purposes. That is incorrect.

If the insured person holds an incident of ownership -- such as the power to name or change a beneficiary -- it doesn't matter whether the insured person names his or her estate as beneficiary, or names a specified beneficiary such as his or her child. Either way, the proceeds of the policy that are paid to the beneficiary are included in the gross estate of the insured person (the decedent) for Federal estate tax purposes. This is pretty basic estate tax law. Yours, Famspear 16:40, 9 November 2006 (UTC)

Post-script: Just to give some more background, here is the relevant excerpt from 26 U.S.C. § 2042:

The value of the gross estate shall include the value of all property—
(1) Receivable by the executor
To the extent of the amount receivable by the executor as insurance under policies on the life of the decedent.
(2) Receivable by other beneficiaries
To the extent of the amount receivable by all other beneficiaries as insurance under policies on the life of the decedent with respect to which the decedent possessed at his death any of the incidents of ownership, exercisable either alone or in conjunction with any other person. [. . . . ]

(Bolding added by Famspear). Paragraph 2 is the "kicker." Yes, it would be nice if you could avoid Federal estate tax merely by naming the kids (and not your estate or executor) as your beneficiary on the life insurance. Unfortunately, if you had the power to name (or change) the beneficiaries, it won't work. Yours, Famspear 16:50, 9 November 2006 (UTC)

Second post script: As I recall (and I haven't done estate taxes in many many years), one way to structure this so the life insurance proceeds actually ARE excluded from your gross estate is to set up a life insurance trust -- especially with someone else as trustee -- and make a gift of money to the trust. The trust then takes the money, buys the life insurance policy, and holds the sole right under the policy to name or change beneficiaries. The trust names your kids as the beneficiaries. That way, you yourself hold no incident of ownership, your kids get the proceeds when you die, and the proceeds are not included in your gross estate. (You do have a possible issue with gift tax on the transfer of the money from you to the trust, of course, but that's separate. I don't want to get started on that.) Yours, Famspear 16:59, 9 November 2006 (UTC)

I am quite happy to be reverted when incorrect. Thanks for the clarification. Aren't there policies that do not allow a beneficiary to change unless they predecease the purchaser, or am I mistaken? Unfocused 17:41, 9 November 2006 (UTC)
Dear Unfocused: I don't know the answer to that question. I would assume that there could be such a policy somewhere. I would think that such a provision would make it harder for the insurance company to sell the policy in the first place. Anyway, I apologize for wandering from the main topic of the article itself. Also, estate tax is not a particular area of expertise for me -- it's been too long since I've dealt with it. Yours, Famspear 17:47, 9 November 2006 (UTC)
Or is the option to not pay the policy premium sufficient interest to trigger taxability? I expect I've answered my own question. Unfocused 17:49, 9 November 2006 (UTC)

Dear Unfocused: I would think that the mere option not to pay the premium, or to stop paying the premium, would not in and of itself trigger tax liability (would not in and of itself make the proceeds be includible in your gross estate). I think mainly it's the power to change the designation of who is the beneficiary that causes the problem. If you have that power under the policy and you die with the policy in that condition, then the insurance proceeds are included in your gross estate, regardless of who the beneficiary is. Yours, Famspear 17:56, 9 November 2006 (UTC)

[edit] inheritance taxes in case of non resident spouse

I am a US citizen,non-US resident, my husband is a French citizen, also non-resident. Upon my death, he will automatically inherit 50% of my pension plan. As a non-US citizen or resident, will he be liable for US taxes on this money? We spend lots of time in the US each year, but not enough to qualify for resident status. Please clarify the situation for me. Thanks.83.202.100.243 23:57, 6 December 2006 (UTC)

You should consult a U.S. tax attorney or accountant with international expertise because your issue may be covered by a treaty. U.S. citizens are taxed on their worldwide assets. However, a credit is applied against U.S. estate tax for certain death taxes paid to other countries. In addition, there could be a treaty between France and the U.S. that directs how such money is to be taxed by both governments. The French government may want a piece of the pie. FloridaTaxMan 03:49, 9 March 2007 (UTC)


[edit] "Tentative Tax" Data

Is there a way to make that section prettier? Maybe with a table? I don't have the Wiki-experience necessary to create one. —The preceding unsigned comment was added by Superabo (talk • contribs) 01:25, 9 January 2007 (UTC).

[edit] March 8, 2007 Updates

I updated a few sections to expand on some comments provided by other contributors. Most notably, there is a reference to marital deduction problems for non-U.S. citizen surviving spouses and an enhancement to the strategy/planning provisions. If there is anything someone wants covered or expanded, I'm happy to help. FloridaTaxMan 03:49, 9 March 2007 (UTC)

[edit] Curtesy and courtesy

An anonymous user at IP67.175.152.174 has astutely picked up a spelling error that apparently has been languishing in the article since July 3, 2006. The correct word is indeed "curtesy," (not "courtesy"). A curtesy is "the husband's right, at common law, upon the death of his wife, to a life estate in all the estates of inheritance in land which his wife possessed during their marriage." Steven H. Gifis, (Barron's) Law Dictionary, p. 113 (2d ed. 1984). "Courtesy" is "a polite, helpful, or considerate act or remark." Webster's New World Dictionary of the American Language, p. 326 (2d Coll. Ed. 1978). Yours, Famspear 21:13, 9 March 2007 (UTC)

[edit] Inheritance Tax Neologism

There should be a section explaining the Inheritance Tax neologism; especially given that there is a Death Tax neologism section.

[edit] Jersyko's Unwarranted Erasure

what was added about the "Death Tax" neologism is neither original research nor novel interpretation. This is a common argument found in virtually every essay against the Estate Tax. Furthermore the mathematics for this particular argument are discussed earlier in the article. Thus is only makes sense to have this there. Otherwise only half of that particular argument is explained. —The preceding unsigned comment was added by 128.12.77.96 (talk • contribs).

  • I've reviewed this, and I agree with Jersyko's view that the sections added appear to be OR. If you want to include this material you must source it, please. See WP:V which is the policy on this point. AndyJones 07:39, 30 May 2007 (UTC)
    • Yep, I agree with Andy's citations of policy in this case. Reverting again, as it was added in substantially the same form without citation and perhaps with an even more POV slant (e.g. "Death tax supporters . . ."). · jersyko talk 23:59, 4 June 2007 (UTC)
      • I do not agree. There is a total of 1 citation in both the Arguments Against and Arguments in Favor sections combined. These are all common arguments and it is inappropriate to credit any one individual. In both paragraphs you see qualitative phrases such as "Many opponents of the estate tax refer to it as..." (Death Tax section), "Supporters of the estate tax also point to...," "Opponents also argue that the..." My additions are just like these and it is wrong to cite these claims to a single author. Perhaps you should rewrite my additions if you feel they are biased. But they mostly clarify the claims already made in the third paragraph of the Arguments Against section and shows how it ties into the Death Tax section. —The preceding unsigned comment was added by 128.12.77.97 (talk • contribs).
        • Perhaps these entire sections need to be excised. I've tagged them with {{original research}} · jersyko talk 00:21, 5 June 2007 (UTC)
          • Other tax articles such as the Flat Tax article have similar sections. I do not believe specific citation in such areas is necessary or even appropriate as long as its clear that the statements are simply widely held arguments 128.12.77.97 09:43, 12 June 2007 (UTC)

No, specific citation in an area consisting of statements that are "simply widely held arguments" is, as a general proposition both necessary and appropriate. If they're widely held arguments then, by definition, someone other than the Wikipedia editor inserting them is making those arguments in published, reliable sources. The more widely held the arguments, the easier it will be to find specific citations. Yours, Famspear 11:52, 12 June 2007 (UTC)

[edit] Arguments Against

The scenario in the paragraph I edited did not make sense without knowing the number of heirs and was written confusingly

[edit] Moved section

Moving this section from Illegal immigration to the United States for possible inclusion here as the subject matter is more related to estate tax than to immigration. Does need to be sourced though Brimba 03:48, 12 July 2007 (UTC)

Ability to remain an illegal alien while outside the United States
For gift and estate tax purposes, the taxing jurisdiction depends on factual residence. Residence is legally established by actual presence plus the mental state of intending to remaining indefinitely. Once established, residence cannot be changed with both elements presence and the requisite intent to remain at the new residence. Therefore, an illegal alien could establish residence in the United States, leave the country and die and yet subject all his worldwide assets to the US estate tax.

[edit] Estate tax (United States) -- NEEDS "HISTORY OF"

At present there is a major deficiency in this article since has no information about the origins of the US Estate Tax, the major laws that have been passed concerning it since its introduction, and an overview of the rates during its history. 66.213.10.5 (talk) 14:36, 16 April 2008 (UTC)

[edit] A mess

Wow, this article is a mess. I recall attempting to clean it up a year or two ago, but I obviously failed. In any event, I'm essentially useless here now because I am no longer practicing estate and trust law, so my knowledge has grown stale. Original research pervades this article and many citations are needed, but one of the main problems is simply article organization. I may be able to help on the latter point, and will give it a try in the next few days. · jersyko talk 23:26, 17 April 2008 (UTC)

[edit] Do we have a POV fork out there?

I apologize if this has already been pointed out here and I missed it, but I just noticed that there is an article called Death tax which has some characteristics of being a POV fork. Should the material in the "Death tax" article be cleaned up and merged into this article? Famspear (talk) 17:19, 5 June 2008 (UTC)

  • You are right. It is a fork and they should be merged. AndyJones (talk) 20:06, 5 June 2008 (UTC)