Tags: estate | tax | Buffett | Gates

Revise the Estate Tax to Account for Charitable Gifting

Thursday, 13 Dec 2012 03:28 PM

By Bill Spetrino

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I am an independent voter who chooses the most business-friendly, pro-growth, fiscally conservative candidate. I am all for charity that each individual chooses themselves.

I understand a progressive-tax program, but do not believe the federal government should take more than 25 percent of someone's income.

Or more than 15 percent of anyone's capital gains or dividends.

Editor's Note: Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions

I am also for eliminating most, if not all, itemized deductions and for lowering the income tax rates.

And I think disability should be taxed like regular income, especially since more people have gone on disability than have gotten a job in the past four years.

The other day, a group wealthy Americans led by Warren Buffett and Bill Gates Sr., the father of Microsoft founder Bill Gates, and a Disney heir supported a proposal from the nonpartisan, nonprofit United for a Fair Economy.

United for a Fair Economy plans to sell this proposal to the next newly elected Congress.

The proposal basically will exempt the first $2 million per person, with a 45 percent teaser rate that would “rise on the largest fortunes.”

So a man with a $10 million estate under this proposal would pay a $3.6 million estate tax, or 36 percent, to the federal government.

The present law exempts the first $5 million and the rest is taxed at 35 percent.

So this same person under the current law would owe $1.75 million in estate taxes, or 17.5 percent.

If the Bush tax cuts expire, we will go back to a $1 million exemption with a 55 percent top tax rate.

My problem is twofold:

1) Buffett and Gates’ son are leaving their entire fortunes to charities run by their children (although Gates is leaving a small amount to his children) and will pay ZERO estate tax.

Yet those who want to pass on their hard-earned wealth to their families have to pay an unusually high percentage.

2) Why should we have such an excessive estate-tax rate given how much taxes the average person pays in a lifetime?

Editor's Note: Small-Town Ohio Accountant Uses Simple Forgotten Secret to Help Investors Pocket Millions

Federal, state, social security, local taxes and real estate taxes have many people paying well over 55 percent of their income now and this current administration wants to make that amount a higher percentage.

My solution is simple. No matter if you are giving to charity or your children, your estate tax is 10 percent total after the first $5 million.

Buffett and Gates would have sent the treasury over $10 billion with that proposal.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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