Just somthing I'm going to throw out there.

Rather than putting the estate (death) tax into place right when a person dies, and then get credit towards a capital gains tax, why not abolish the estate tax and just up the capital gains tax?

Maybe because various levels of government enjoy taxing any majour exchange of wealth; even though no productivity, no income from operations/salaries, no interest-bearing payments nor "actual" capital gains were from investments/operations.

The gift tax is a perfect example. If you give $10,000 to anyone, it gets taxed. Also, if you die while holding estate, the government wants it's piece of the pie for nothing... just like a gift tax. Part of this may be so that people do not leave their estate to a favourite pet, which can't be taxed for it's inheritance.

Just like if someone perishes without a standing will (or one that will hold up legally in court), the goverment(s) are sure to grab the biggest chunk possible. A lot of criminal laws were created to insure that they could gain assets for nothing, especially regarding anti-drug legislation.

Maybe that's why Warren Buffett made a 'charitable contribution' to Bill Gates. He was doing the best he could to pass the money to someone else without the government getting the biggest chunk they possible could.

And with the way capital gains are handled, would an inheritance be considered a "short-term" or "long-term" gain? Because the rates for the formal are quite brutal. If someone came into a lot of money because a family member passed it via their will, not sure how you could label it as long-term.

I know what the estate tax was, I was wondering if this would work. And actually, it would probably generate more income from higher brackets anyways. People don't oft sell the family farm.

Are you talking about seizing belongings that have been directly used to transact illegal affairs or bought with money from those affairs? Because thats what I think of when I think of the criminal law taxtation of sorts you are refering to. I have no problem with that.

Well, and the fact that both he and Gates think things like..... estates left to heirs of those who died are bad ideas.

The capital gains would only be collected if one tried to sell off the property they got. At which point I don't care how much is taxed.

In no direct response....

DEFINITION: Tax Shield - Some measure taken to reduce tax liability of an individual and/or organization.


Not sure if this is still in effect, there used to be a one-time capital gains exclusion for people selling their home. The amount was like 125K or 165K, could only be used once and the person was required to be of or around retirement age (~Age 65). That made sense.

Here's why it made sense...
A person spends a majour chunk of their life paying off a home loan or mortgage. They've probably paid home insurance the entire time. They'd paid their bills and paid their income taxes, property taxes (which includes any school taxation) and sales taxes. At that age, most people no longer have children at home to raise and have a 'partner' or are alone. So they can sell the home and move into something smaller, more manageable and take those funds to use for their retirement years.

The governent will probably do away with this exclusion. Why? Well, I believe that it will see the value of the property turning into cash/liquid assets as a 'windfall', giving them another opportunity to get a portion of available funds from a person.