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Accidental Tax Break Saves $100 Billion

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Sheldon Adelson makes no secret of his disdain for the estate tax.

“How many times do you have to pay taxes on money?” the casino magnate asks, leaning on a blue cane on the cobblestones of Wall Street on a crisp October morning.

{snip}

Federal law requires billionaires such as Adelson who want to leave fortunes to their children to pay estate or gift taxes of 40 percent on those assets. Adelson has blunted that bite by exploiting a loophole that Congress unintentionally created and that the Internal Revenue Service unsuccessfully challenged.

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Estate taxes are criminal. The only reason the Government has gotten away with it is that it's always positioned as class warfare (what did Paris Hilton do to DESERVE that money).

Given that a huge generational wealth transfer is looming, more and more will sadly realize that the estate tax doesn't just hit the super wealthy. Fortunately there are a number of legal ways to get around it that can end up benefiting both the heirs and charitable organizations.

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I agree. Money should not be subjected to yet another tax just because a tax payer dies.

It's a disgusting abuse of government reaching into our pockets at every opportunity.

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while I agree that estate taxes are quite disgusting we have to see that they are part of the US taxation system, with short interruptions, since its beginnings:

The Stamp Tax of 1797

In 1797, the U.S. Congress chose a system of stamp duties as a source of revenue in order to raise funds for a Navy to defend the nation’s interests in reponse to an undeclared war with France that had begun in 1794. Federal stamps were required on wills offered for probate, as well as on inventories and

letters of administration. Stamps also were required on receipts and discharges from legacies and intestate distributions of property.6

Taxes were levied as follows: 10 cents on the inventories of the effects of deceased persons, and 50 cents on the probate of willsand letters of administration. The tax on the receipt of legacies was levied on bequests larger than $50, from which widows (but not widowers), children, and grandchildren were exempt. Bequests between $50 and $100 were taxed 25 cents; those between $100 and $500 were taxed 50 cents; and an additional $1 was added for each subsequent $500 bequest.

In 1802, the crisis ended, and the tax was repealed.7

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Edited by questionmark

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while I agree that estate taxes are quite disgusting we have to see that they are part of the US taxation system, with short interruptions, since its beginnings:

Ah, but at the time, there was no income tax so this would have been a "first tax" on these funds.

It was also enacted during a time of emergency. I don't think too many would have an issue with needing to raise taxes for unanticipated occurrences. In most cases, however, the Government conveniently "forgets" to lower them once the crisis has ended.

You know, like the telephone tax that was enacted to help fund the Spanish-American War and wasn't rescinded until 2006. And not dissimilar to how air travel is still taxed like a luxury item even though it is the bus transportation of this generation.

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I will be lucky if my money lasts until i die and I am still working. Maybe i can just kill myself the day i retire.

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I will be lucky if my money lasts until i die and I am still working. Maybe i can just kill myself the day i retire.

Or, you might want to work (albeit it a little less) until the day you die...like my great grandfather who still worked at 99.And I can't recall that anybody ever called him unhappy about that.

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while I agree that estate taxes are quite disgusting we have to see that they are part of the US taxation system, with short interruptions, since its beginnings:

Whoa! It didn't take long after our fight of Independence to get right back to the feed bag....lol

But, wisely, after the crises was over, they repealed it. I can't remember the last time any sort of tax was 'repealed' by our wise overlords.

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Whoa! It didn't take long after our fight of Independence to get right back to the feed bag....lol

But, wisely, after the crises was over, they repealed it. I can't remember the last time any sort of tax was 'repealed' by our wise overlords.

lots of taxes were repealed around the same time, most notable the alcohol tax introduced to pay for the war of independence, or the major cause of Kentuckian distrust of the government

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When I'm productive, I'm taxed for it.

When I try to get my money out of my tax-controlled vehicles like 401k or IRA, I'm taxed again.

When I take my money across the street (and now the internet) to go buy something, I'm taxed again.

When it's time to sell what I bought, and recover at least a fraction of the value that I've already paid taxes on three times, it's regarded as income again and so I'm taxed again.

What a great deal government has written up for itself!

But is all that taxation enough? Nope, government and its frankenbank need to control our money too!

big-fed-ponzi-scheme.jpg

Edited by Yamato
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When I'm productive, I'm taxed for it.

When I try to get my money out of my tax-controlled vehicles like 401k or IRA, I'm taxed again.

When I take my money across the street (and now the internet) to go buy something, I'm taxed again.

When it's time to sell what I bought, and recover at least a fraction of the value that I've already paid taxes on three times, it's regarded as income again and so I'm taxed again.

What a great deal government has written up for itself!

But is all that taxation enough? Nope, government and its frankenbank need to control our money too!

big-fed-ponzi-scheme.jpg

Technically your 401(k) is funded with pre-tax money and you pay the tax on it upon dispersal. So it's only taxed once.

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Technically your 401(k) is funded with pre-tax money and you pay the tax on it upon dispersal. So it's only taxed once.

Some 401ks are funded with taxed income, and tax-free upon dispersal. But you're right, it's only taxed once, until we try to do something that's legal with it.

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Some 401ks are funded with taxed income, and tax-free upon dispersal. But you're right, it's only taxed once, until we try to do something that's legal with it.

There's also the other issue that politicians have been salivating over all of this money for a couple of decades now. I think the only thing that saves it is that it would be political suicide to try and go after it.

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The estate tax...imho....is a vile thing....bordering on necrophil!a

You are taxed when you make money (income tax) you are taxed when you spend money (sales tax). If you spend that money on tangible, long term possessions, you get a "Property tax" that is subject to someone else's opinion of value of your property...now they want to tax whatever coins you have managed to save away for your children and progeny on your death....

They should not call it "Government"....they should call it "Ghoulvernment"....preying on the dead.

Edited by Jeremiah65

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Whoa! It didn't take long after our fight of Independence to get right back to the feed bag....lol

But, wisely, after the crises was over, they repealed it. I can't remember the last time any sort of tax was 'repealed' by our wise overlords.

The most recent I can think of:

A pesky, century-old tax on your phone bill is finally being put to rest.

The Treasury Department said Thursday that it will no longer collect a 3% federal excise tax on long-distance calls and would refund about $15 billion to taxpayers.

The tax was imposed in 1898 to help pay for the Spanish-American War. It was designed as a tax on wealthy Americans, back when phone service was considered a luxury.

USA Today - 2008

I guess it finally got that pesky Spanish-American War bill paid off in full.

If only we'd known it would be that expensive - where we'd be paying on it for 100 years!

Harte

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Technically your 401(k) is funded with pre-tax money and you pay the tax on it upon dispersal. So it's only taxed once.

Unless you die holding some of your disbursement.

Harte

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