Re: how to compare living standards

On Tue, 18 Apr 2006 13:30:07 -0500, "Jim Blair" <jeb@xxxxxxxx> wrote:

"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote in message

The lowest marginal rate on the unified estate and gift tax is 18% on
the first $10,000 above the exemption limit. The highest marginal
rate is 47% on the amount exceeding $2 million. The tax on an estate
worth $100 million would be $46.4 million, but I suspect few actually
pay that large a tax because of the various options available such as
prior provisions for foundations, charitable gifts, etc. largesse.

Comment on this from Grinch to sci.econ Tue, 29 Oct 2002:

A very interesting fact about the estate tax is that the rate of tax
paid goes *down* for the wealthiest estates.

Taking a quick look at the IRS Statistics of Income at www.irs.gov,
for the most recent year readily available, the overall effective tax
rate for the total >$20 million group was 14.6% -- the *lowest* rate
for any group with assets over $2.5 million (which is about where the
tax becomes meaningful for a married couple)

And in there were 88 estates with assets totaling $4.6 billion that
paid a grand combined total estate tax of zero dollars ($0).

So we can see that the estate tax is no threat to the Kennedys (or
Buffets or Gateses) or other billionaires who publicly sign on in
support of it.

This is misleading. The very wealthy create foundations or other
non-taxed vehicles _before they die_ in order to select the
beneficiaries themselves rather than making Uncle Sam and thus the
general taxpayer the beneficiary. The value of the estate itself is
greatly reduced on death and is therefore not subject to the high
marginal rates. I think that is all that Grinch was really observing.
.

Relevant Pages

  • WSJ: Obama Plans to Keep Estate Tax
    ... Obama Plans to Keep Estate Tax ... Democrats Want to Freeze Levy at Current Levels Instead of Letting It ...
    (misc.taxes)
  • Estate of DAmbrosio v. Commissioner, 101 F.3d 309 (3d Cir. 1996)
    ... ESTATE OF ROSE D'AMBROSIO, Deceased, VITA D'AMBROSIO, Executrix, Appellant ... ON APPEAL FROM THE UNITED STATES TAX COURT ... even though the decedent had sold her remainder ...
    (misc.taxes)
  • Re: inheritance taxes/US
    ... >does not levy an inheritance tax, although it does impose an estate ... In 2001 the marginal rate for estate taxes on ... You misunderstand the concept of "marginal rate". ...
    (misc.rural)
  • Re: how to compare living standards
    ... you're in the top tax bracket, giving $100 to the United Way (or Jim Blair ... your net worth (which is what your estate is called, ... cleverly "avoided" $35 of income tax. ...
    (sci.econ)
  • All About Death & Taxes Beyond Estate Taxes
    ... All About Death & Taxes Beyond Estate Taxes ... whether or not estate tax is owed. ... FINAL INCOME TAX RETURN ...
    (misc.taxes)