Sen. Bernie Sanders says 99.7% of American families would be exempt from estate tax

[L. Coyote]

Bernie Sanders
‎"Let us be very clear: This tax applies only--only--to the top three-tenths of 1 percent of American families; 99.7 percent of American families will not pay one nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich," Sen. Sanders said in his filibuster regarding the estate tax provision of the tax break deal."

http://www.politifact.com/truth-o-meter/statements/2010/dec/14/bernie-s/sen-bernie-sanders-says-997-american-families-woul/

While the debate over the compromise tax agreement proposed by President Barack Obama has focused mostly on Bush's income tax cuts and whether they ought to be extended to wealthy Americans, the issue of estate taxes has also become a sticking point for some legislators.

Under the plan, the estate tax rate would be set at 35 percent, with an effective exemption of $5 million.

Many Republicans had hoped to do away with the estate tax altogether, and Democrats last year had proposed a higher rate: 45 percent on the value of estates over $3.5 million.

The compromise has ruffled feathers on both sides of the aisle. Sen. Jim DeMint, R.-S.C., for example, said he would not support the plan because he considered the estate tax compromise a tax increase. We ruled that claim Half True.

Meanwhile, Sen. Bernie Sanders, an independent from Vermont and a self-described democratic socialist, sent out a message via Twitter on Dec. 13, 2010, saying that under the estate tax plan, "99.7% of American families will not pay 1 nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich."

According to an analysis by the nonpartisan Tax Policy Center, Sanders is correct.

The Tax Policy Center estimated that about 99.7 percent of estates were exempt from the estate tax in 2009 when the first $3.5 million of an estate was exempt. ................

[LiberalFighter]

1. I have a question about the money left to people.

Do those that RECEIVE the money pay any type of tax?

[Hassin Bin Sober]

5. No. That's the point.

These people want to skate through life paying zero income tax.

[csziggy]

6. The heirs that receive the money are the ones who pay the estate tax

Out of their share of the estate.

There are plenty of ways around paying estate taxes especially for the uber rich. Estate planning is big business, though it usually means paying as much to avoid taxes as the taxes would cost. The wealthy can give sizable cash gifts to their heirs each year, there are one time major gifts for transferring chunks of wealth, all sorts of trusts and mechanisms for transferring wealth without tax consequences, and if nothing else, they can buy insurance policies that would pay the estate taxes for the heirs.

[BlueMTexpat]

7. There is usually an inheritance tax that is levied by the state, which

has nothing to do with the federal estate tax in discussion.

http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States

[L. Coyote]

10. Many of the richie richies have accumulated wealth that has never been taxed!

[LiberalFighter]

17. And if I have it right those receiving the benefits of a dead person

don't want to pay taxes on money that was never taxed for them.

They really need to drop the exemption down to $500k.

[L. Coyote]

18. The exemption limit considers value of farms and ranches

which is typically several million dollars, albeit that capital value only produces a decent income for a family operation. At half-a-million, families would lose their farms.

[LiberalFighter]

16. Thanks for the responses. It is what I thought. Just wanted confirmation.

[Yupster]

19. Good question -- simple answer is -- it depends

It depends on where the money was before the person died.

Most people have their largest investment in a retirement account, generally an IRA, 401 (k) or 403 (b). When the owner dies, this money goes to the beneficiaries and is fully taxable as income to the beneficiary at the beneficiary's rate.

Many people who die had a lot of their money in annuities. If it's a qualified annuity, it's fully taxable to the beneficiary like an IRA or 403 (b). If it's a non-qualified annuity, only the gain in the account is taxable to the beneficiary. If the annuity was around for five years, that could be very little. If it was around for 30 years, that could be 3/4ths of the account as taxable.

Life insuance is tax free.

Stocks get a stepped up basis to the date of death so they are not taxable nor are most mutual funds (unless in retirement plans), bonds, cd's cash etc.

So, it depends.

But since most people have their largest account in qualified retirement plans, there will almost always be some amount that is taxable to the beneficiary.

As far as the estate tax goes, it's only the deceased rich who get their estates assessed with the tax, but the rich don't pay the tax as they are deceased. It is actually their beneficiaries who pay the tax by getting a lesser share of the estate after the government takes its share.

My aunt died when I was in my twenties and a schoolteacher. Her estate was hit with the estate tax but it wasn't she who paid it as she had died. I paid the tax, and so did my brother, sister, mother , father, as well as the World Wildlife Fund, the dog rescue place, the local SPCA, the adoption place for retired greyhounds, the church, and many other heirs.

That's why the "only effects .3 of 1 % of the population" doesn't hold up. I was effected by it, and I was making $ 16,000 a year and wasn't in the top 1 % of anything, other than sterling personality perhaps.

[L. Coyote]

2. FACEBOOK: I Support Bernie Sanders' Filibuster of the Tax Cuts for the Rich

http://www.facebook.com/pages/I-Support-Bernie-Sanders-Filibuster-of-the-Tax-Cuts-for-the-Rich/162643503777907

[spanone]

3. the more wealth, the more influence they peddle

[fascisthunter]

4. EVerybody... feel sorry for the rich damn it

it's hard having that lifestyle ya know... sheesh.

[L. Coyote]

11. Yes, I watched a guy spend almost all day polishing his white yacht at the marina

Life's a bitch if you're rich!

[fascisthunter]

20. and they are the Big Mouths Telling Everybody how to Live

"I'm a self made man, yessir, the infrastructure that generation of American tax payers payed for had nothing to do with it. We are special people." :crazy:

[Cid_B]

8. The headline basically says thats its ok to steal from .3% of the population...

No matter what you think about the issue, the phrasing here basically comes across as "Yeah, its bad but we are going to do it to someone else so don't worry"

[L. Coyote]

12. Have you considered the context of the statement, the current law and the change proposed?

[Commie Pinko Dirtbag]

13. Steal? STEAL?

Jesus H. Christ on a cold-fusion-powered purple yellow-polkadotted pogo stick.

[Commie Pinko Dirtbag]

14. I love Internet memes.

[EstimatedProphet]

15. Bullshit

Taxes aren't just taken away from people, just because, no matter what your master Rush Limbaugh says. Taxes pay for society. Rich people use more services provided by society - in addition to the basics, they use the majority of the legal system. People that don't pay taxes aren't heroes, they're welfare queens and moochers.

[L0oniX]

9. ...as in WTF I just need to live with no SS & where I can be homeless and not freeze to death.

[SoCalDem]

21. How dare he speak truth? Media likes hyped-up lies

Truth is boring..all "fact-y" & stuff:(