Yes, nothing makes the case stronger that we must repeal the inheritance tax by highlighting a successful business, that is still successful, and has been handed down to its third generation of owners and is still expanding.
Seriously?? This is the best case study the Heritage Foundation could find?
I’ve got news for our conservative brethren.? It is not the American dream to have economic success handed out to you based on who’s vagina the doctor yanked you out of.
That is not the “American Dream.”? The estate tax exists because people get a windfall based on their bloodlines and receive valuable property as a gift.? The right to receive this property without paying for it exists as a result of the State’s creation of probate laws.? It, therefore, makes sense that the State would seek revenue “from the incomes and inheritances of those deriving the most benefit and protection from the Government.”
You’ll see midway through the video they start talking about the expense of probate and probate lawyers.??? Guess what?? Repeal the estate tax and you’ll still have to probate estates and have probate lawyers.
The other problem other than highlighting a business that is successful after being transferred twice despite the estate tax is that the company’s problem was likely entirely and legally avoidable.? An effective “buy-sell” cross-purchase plan agreement likely would have removed the estate from any estate tax implications.? Also, simple trust planning could also have prevented it.? Combined, its entirely possible the entire business could have passed without any estate tax implication at all.
While conservatives have been pushing this story all over the Internet lately, nobody has actually fact-checked this story to see if their estate tax problem was the result of a lack of a business succession plan.
In other words, if you transfer your economic interest before you die or set up transactions that will keep the transfer of wealth from being considered for estate tax purposes, then you can legally transfer your family business to the next generation without leaving them with any estate tax bill now.? It’s how Paris Hilton has all that money (what, you thought it was the sex tape or her acting?)
Responsible estate tax planning eliminates the need to repeal the estate tax.? You can pass an estate worth? up to $8 million alone from the simple A-B Trust example described in the link and your estate incurs no estate tax liablity.? Also, trusts also vastly reduce the probate costs of an estate (which in most estates actually exceed any estate tax implications) because the property is transferred outside of probate.? So, it legally eliminates both problems identified in the video.
It’s not a death tax because it’s not a tax liability owed by the person who died, it’s owed by the estate because the property is being transferred (or “inherited”) to people who are not paying any value for the property and had no ownership interest in the property.? That’s why the Monopoly board still calls it an inheritance tax, and haven’t changed it to the focus-group inspired “death tax” moniker.
According to the Tax Foundation (hardly a progressive, liberal group), since 1987 only .003% of all estates have had to pay any estate tax.? That’s why the estate tax is a red herring of an issue.? It is one of the most legally avoidable tax consequences there are in life, unlike death itself.