Charles Brown
>>> Max Sawicky <sawicky at epinet.org> 08/05/99 10:58AM >>>
Delicious. A nice case of the super-rich screwing
the rich. The top estate tax rate far exceeds the
capital gains rates. Currently the dead guy's
financial asset appreciation escapes the CG rate,
but the asset value, minus the large offset,
gets hit with the high estate tax rates, for
those richies who didn't bother to do proper
estate tax 'planning.' The offset is large
to almost everybody, except those with multi-
million and billion dollar estates. Now
their heirs would pay the 20% on appreciation,
but nothing on the estate, and Daddy saves on
the cost of tax planning.
By trading the estate tax for a slightly beefed-up capital gains tax, the decedent's financial assets are no longer taxed as a lump sum at the high top estate tax rates. Only the appreciation is taxed, and at the low CG rates. If you were due for a million dollar inheritance, under estate tax you pay nothing, under the 'new' CG tax you could pay 20% on the taxable portion of the million.
It's the "Forbes 500 tax cut." [(c) Max B. Sawicky ]
mbs
This interesting article illustrates how much bullshit there is in the "death tax" debate, when even this Reagan-Bush economist admits most rich people manage to avoid most estate taxes. It makes the interesting argument (whether its true I dont know) that the present GOP bill would actually not save heirs money on capital gains type assets, since it actually will tax such assets from the time that the original owner bought them, rather than when the heir inherits them - a current massive loophole in the law. ---Nathan Newman