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Comment by rtpg | Hacker News Reader

Nobody understands estate taxes, it's so frustrating. I have had conversations with coworkers who believe that the gov't will ruin you through estate taxes. People don't seem to understand things like (depending on locality):

- If you don't have literally $1M in assets you get taxed zero

- If you live in the home it is exempted

- There can be major deductions

The idea that the state comes in and destroys your way of life through estate taxes is an amazing failure of describing how a thing works (right up there with how progressive income taxes work).

I mean the fact that everyone's assets are tied up in things like houses doesn't help things, but... yeah.

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I don't think it's a failure to describe how it works so much as a long running publicity campaign dedicated to circulating inaccurate but emotive claims. There's a small army of people who get paid to write op-eds about small farmers being forced of their land by the cruel gubmint etc. etc., just there is about many other fake controversies, from tobacco to fossil fuels.

You can explain how things work until you're blue in the face but it's not very effective if there's someone who's perfectly happy to lie, whether implicitly or (increasingly) explicitly. An awkward fact about propaganda and publicity campaigns is that the people who are articulating them don't necessarily need to believe in them, or even have others believe in them (though that helps). Professing the belief publicly can be an effective social signal for recognizing and cooperating with peers, as wella s identifying antagonists - think of the delight some political actors have in 'triggering' those with whom they disagree. One does not need to care about the issue oneself; political currency can be made out of simply upsetting other people, for both identification and entertainment purposes.

Sorry, I totally agree that it's not about explaining stuff.

I do acknowledge the massive PR campaign on this front making things confusing for people. I have my doubts about it being effective in itself. There feels like a baseline assumption (stuff like "well it's my stuff" or "taxes are annoying") that end up getting re-inforced through those campaigns.

Maybe the real solution is nuking every op-ed page of the face of the planet.

There's a small army of people who get paid to write op-eds about small farmers being forced of their land by the cruel gubmint etc. etc.

Didn't mean to repeat myself bthere but it's only a matter of time before we see op-eds about small content farmers being forced off their domains by the estate tax. Might have to start a satirical Twitter account to fulminate about it.

The anti-estate tax lobby has masterfully branded it a death tax implying that it’s a tax when you die. There’s a huge tax waiver in the form of stepped up cost basis - capital gains tax is calculated using the share value when inherited not on grandpa’s purchase price.

Note that the step-up in basis is something the Biden administration is looking to reduce to $1M/person.

I think many people feel that if they don't constantly complain about the estate tax, the threshold will be lowered. They're not necessarily wrong.

If it did get lowered to affect normal people it'd only be from the efforts of rich people to poison the well against the taxes.

Interesting theory. I haven't read of any lobbying to that end (most seems to go into favorable windows and other means of exemption) but it would certainly create a larger block of opposition.

In the US:

>As of 2021, only estates valued at $11.70 million or more are subject to federal estate tax.

No sympathy for people who think that sort of windfall from their parents should somehow be untouchable.

Yes, I think you may have misunderstood what I said. There are people worried about the threshold lowering, e.g., taxing estates of only a few hundred thousand, or perhaps anything (I'm not saying a lowering to this degree is remotely likely.) So they complain about the estate tax at its current levels. It's an example of the tug-of-war mentality that appears in much of American politics.

> If you don't have literally $1M in assets you get taxed zero

It's actually $11.7 million now.

> - If you don't have literally $1M in assets you get taxed zero

Oh it's much, much worse than that. The Trump tax "cuts" actually doubled the Federal estate tax thresholds to ~$11m for a singled person and ~$22m for married couples.

> - If you live in the home it is exempted

So I actually have a bit of a problem with this because generally real estate passes to beneficiaries of the estate on a stepped up basis. The idea is for children not to be saddled with a huge tax debt but there has to be limits to this.

> ... amazing failure of describing how a thing works

I see it from the somewhat opposite view and that is that conservatives in the US at least are so easily manipulated to the point where a seemingly large portion of them now believe democracy isn't working for them and you see this bubbling over at incidents like the attempted insurrection of Jan 6.

It's downright ironic that the reddest states are actually the most Federally dependent and the democracy that supposedly isn't working for them is a system that gives such states political power far in excess of their population such that a political party can in many places hold power with ~40% of the vote.

I don’t get how anything about this is worse.

That $11m or $22m was already taxed and the person who earned it paid the government an unusually large sum of money for the privilege of being successful. Why should they get to double dip? The government taxes everything you earn, all the interest you earn on that money, all the property you buy, and all of the goods and services you buy. It then taxes the person selling those goods and services for the privilege of selling them. Any time a dollar hits the economy it’s probably been taxed 6 or 7 times. And for all this what do we get? Subpar infrastructure and bloated government programs that enrich bureaucrats.

You know the phrase, "you can't take it with you"? Turns out that's literally true -- when you're dead, there is literally no use for possessions anymore. We all end up in the cold, cold ground with exactly the same amount of "stuff."

The estate tax is a "government double dipping," it's a tax that's been around since the founding of the country, put there by the people who very specifically wanted to avoid generational wealth forming dynastic rulers over their newly-hatched nation.

With an exemption on $11 mil, I wouldn't shed a tear if every cent beyond that were taxed at 100%.

If I get taxed on my income, and then give half of it to you, should it be exempt from taxes because it was "already taxed?" The whole idea is that money is taxed when it passed from one person to another.

Thankfully there are emerging alternatives to money that have been increasing in usage for about 13 years and offer more control to the individual as to how the resources under their domain are allocated exactly and transparently thru governance that are more accessible work arounds than the trusts, charitable writeoffs, etc.

>It's downright ironic that the reddest states are actually the most Federally dependent

Why is this ironic?

Because the red states are being subsidized by the very blue states they claim are ruining the country.

The red states are basically adult children complaining about their parents interfering in their lives while living rent-free in the basement.

Oh, that would seem the intuitive path to me. If they claim to want to be left alone and have minimal government distortion in their lives, wouldn't we expect those experiencing the most distortion to resent it most?

>I see it from the somewhat opposite view and that is that conservatives in the US at least are so easily manipulated to the point where a seemingly large portion of them now believe democracy isn't working for them and you see this bubbling over at incidents like the attempted insurrection of Jan 6.

Could you explain why you think it is an insurrection? I tend to think of insurrections as things that involve a lot more violence, the only violent death was from police killing a protester, the rest were heart attacks from walking too much.

138 police officers were injured and there was plenty of damage. https://en.wikipedia.org/wiki/2021_United_States_Capitol_att...

Why would you think that Jan 6th was not violent?

>Why would you think that Jan 6th was not violent?

>They [the injuries] ranged from bruises and lacerations to more serious damage such as concussions, rib fractures, burns and even a mild heart attack.

Because the average football match has more injuries than that. Oddly enough the only source that cites 138 cases also cites Brian D. Sicknick as dying from injuries sustained from protestors attacking him: https://archive.is/0kUab

In more detail:

https://archive.is/YVfFk#selection-367.0-371.193

>Capitol Police Officer Dies From Injuries in Pro-Trump Rampage

>A United States Capitol Police officer died Thursday night from injuries sustained when he engaged with a pro-Trump mob that descended on the U.S. Capitol the day before.

>Mr. Sicknick was responding to the riots on Wednesday and “was injured while physically engaging with protesters,” the agency’s statement said, although officials didn’t immediately elaborate on the nature of his injuries or how he interacted with the crowd. After sustaining the injuries, Mr. Sicknick returned to his division office, collapsed, and was taken to the hospital.

Meanwhile in the real world:

>The Medical Examiner report said “Brian Sicknick, 42 years old: Cause of Death—Acute brainstem and cerebellar infarcts due to acute basilar artery thrombosis Manner of Death—Natural.”

https://www.klkntv.com/officers-death-after-insurrection-was...

I rarely see such ham-fisted outrage bait outside of the Daily Mail talking about immigrants coming to take your job and rape your daughter. So how much do you want to bet that all of the other 138 cases are due to police just being clumsy and stubbing their toes?

> So how much do you want to bet that all of the other 138 cases are due to police just being clumsy and stubbing their toes?

If there was an escrow/judge that we could both trust I'd bet ~10k USD

Not to mention all the fun and legal ways to work around them: trusts, gifts, life insurance, charitable donations, investing in the family business, etc.

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