How to Fix Social Security

[Sheriff Gonna Getcha]

Originally Posted by 70Chip

The death tax is like 50% so if you inherit a business from your parents that is worth 3 million dollars, which could be a small appliance store for example, you may be hit with a ginormous tax bill. Now, obviously Buffet isn't buying small appliance retailers but you see the point.

Estate tax (United States - Wikipedia, the free encyclopedia)

Buffett thinks this is one tax that's a good idea

Grover G. Norquist on the Death tax and Warren Buffett on NRO Financial=

I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.

[70Chip]

Originally Posted by Sheriff Gonna Getcha

I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.

It's not about it being "cold". It's about sensible economics and being able to pass something on to your children. The people who should be paying this tax are people like Buffet and Gates and their ilk. I can see a logic in the idea that Gates should have to give back some of his billions. Especially since his products suck balls. But I digress. These people are the ones who can afford to set up avoidance mechanisms and never seem to pay taxes of any kind. Most government regulation misses its target. The really, really big companies can absorb all these rules and fees and retrofitting all their bathrooms for transgendered whatever. It's their up and coming potential competitors who get nailed. What it is is Liberal Fascism.

[firstdown]

Originally Posted by Sheriff Gonna Getcha

I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.

Your right and when they realise that their is an issues and now are much older and now need a large life policy the premimums can be THOUSANDS PER MONTH and allot of times it is not affordable. You also think that its ok for the goverment to put such a burden on small family busnesses? Remember the tax is based on the value of the business and not the income that the family makes off the business. So if your a small business makeing X and you have a plant with 20 workers that the goverment says is worth 5,000,000 then thats what your taxed on even though you may only make $120,000 per year.

[Sheriff Gonna Getcha]

Originally Posted by firstdown

Your right and when they realise that their is an issues and now are much older and now need a large life policy the premimums can be THOUSANDS PER MONTH and allot of times it is not affordable. You also think that its ok for the goverment to put such a burden on small family busnesses? Remember the tax is based on the value of the business and not the income that the family makes off the business. So if your a small business makeing X and you have a plant with 20 workers that the goverment says is worth 5,000,000 then thats what your taxed on even though you may only make $120,000 per year.

If the business purchases life/key-man insurance on the CEO/President/Founder, it's deductible. A few thousand dollars a year is not going to tank a business worth millions. Also, the estate tax only affects individuals worth $2M (including his/her interest in any business he/she owns in part or whole). So, it's not as though the guy who runs the candy shop or down the street or his family is typically unaffected by the estate tax.

[firstdown]

Originally Posted by Sheriff Gonna Getcha

If the business purchases life/key-man insurance on the CEO/President/Founder, it's deductible. A few thousand dollars a year is not going to tank a business worth millions. Also, the estate tax only affects individuals worth $2M (including his/her interest in any business he/she owns in part or whole). So, it's not as though the guy who runs the candy shop or down the street or his family is typically unaffected by the estate tax.

Well the reason that smaller businesses do not have this problem is because Bush (I think Bush) raised the value of an estate before it is subject to these taxes. I'm not sure if or what a business can write off because this is a tax on ones entire estate and not just for the business. So if a person has a personal worth of 1.2 mil and owns a business which is valued at 3.2 mil then his death tax is on 4.4 mil.. Also this problem usuall arises later in someones life and these policies can be very expensive not just the few thousand that you mentioned. I sell life Ins. (I do not do estate planning that whay I'm not sure of the write off) and was contacted by a customer who's Atty. did an estate planning and he determind that he needed 2 mil in life ins..This man made a good living but was not rich and provided around 20 jobs. He was older and had a few health issues and for him to purchase 2 mil in coverage was very very expensive and would only get more expensive as he got older. He did not purchase the policy (which he could not afford) and latter passed away. His family lost the business due to taxes and the city lost a tax paying buisness and 20 people lost their jobs. This was all because of the federal goverments death tax. Yes, maybe he waited too long but he never realized he was worth that much because he only made a small fraction of that. This happens everyday in the US.

[saden1]

Originally Posted by Sheriff Gonna Getcha

I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.

Couldn't agree more.