Estate Tax Why?

Question

With estate tax or "death tax" If my parents pass, and any and all savings have been taxed over the years PRIOR to investing and or putting it in Savings, then we receive the money, why are we taxed on money already taxed?

Answer 1

What kind of selfish bastard are you? Do you really think that you should receive money without the government getting their cut of it?

It's taxed because of jealousy. People don't want you to have that money.

Answer 2

Most relatively simple estates (cash, publicly traded securities, small amounts of other, easily valued assets and no special deductions or elections or jointly held property) with a total value under $1,000,000 and a date of death in 2002 or 2003 and $1,500,000 and a date of death in 2004 or 2005 do not require the filing of an estate tax return.

No Tax on the Person Receiving your Gift or Estate
The person who receives your gift or your estate generally will not have to pay any gift tax or estate tax because of it. In addition, that person will not have to pay income tax on the value of the gift or inheritance received. NOTE: There are some technical applications for "Income in Respect of Decedent" under §691 that will have to be considered for income earned but not otherwise taxed prior to the date of death.

http://www.irs.gov/businesses/small/article/0,,id=164870,00.html

Answer 3

I think the thought is that America is a better place (or, rather, the American economy is better off) if each individual has to earn his or her own way, rather than live off of the earnings of one's grandparents and parents. Our economy is set up such that we need everyone to be "hungry," becuase then citizens will take risks that eventually benefit society and citizens will "theoretically" not squander scarce resources (or at least they will have squandered them to produce other valuable assets).

The other part of it has to do with "upward social mobility." If folks could simply win the birth lottery by being able to keep 100% of their parents/grandparents savings, then we would have a wealthy ruling class and a lower class who are not able to move up the social ladder (not that we do not have that now). This would take the air out of our economy. The estate tax was intended (supposedly) to level the playing field. Remember, a ruling class is exactly what caused many of our ancestors to leave Europe.... with the hope of finding new opportunities in America....


Kreig Mitchell
www.irstaxtrouble.com
www.irstaxtrouble.com/blog.htm

Answer 4

Tax for transfer of properties