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View Diary: The Estate Tax: Tough Questions and Honest Answers (49 comments)

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  •  Walk me through that (4+ / 0-)

    If I buy $1M in shares of stock, and the stock pays no dividends but rises in value to $5M, unless I sell the shares I pay no tax -- correct?

    If I then die and my inheritors pay no estate tax, the $4M gain escapes taxation altogether. What am I missing?

    •  you are absolutely correct (3+ / 0-)
      Recommended by:
      April Follies, Simplify, neroden

      its called Stepped up basis and it applies to all assets other than income in respect of a decedent... the largest category of IRD is retirement plan assets (IRAs 401ks) don't get stepped up basis

    •  Monopoly (0+ / 0-)

      Think about the game Monopoly and how each player
      starts the game with $1500.  Now imagine real life
      where some start with nothing, while others inherit
      billions.  Who will win?  Without this mechanism of
      the estate tax, the wealthy will be wealthy and stay
      wealthy and on, and on, and on.  It'd'd be
      kinda like the third world.... Fuedalism.

      It can't be "perfect" fairness, nor should we even strive for that .  

      There's a social contract between all
      citizens, rich and poor, and we can do a lot better.

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