The Estate Tax

For those of you that do not know what the estate tax  is: “The estate tax is one part of the Unified Gift and Estate Tax system in the United States. The other part of the system, the gift tax, imposes a tax on transfers of property during a person’s life; the gift tax prevents avoidance of the estate tax should a person want to give away his/her estate”  Much more information can be found on it here: http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States .

Essentially it works much like the gift tax does except it works on the transfer of property that occurs when a person dies.  The tax is not often applied to when the property is left for a spouse or child, but in any other circumstance.

I personally feel this tax, along with the gift tax in general, are simply absurd.  A person should be free to give whatever to whomever he pleases, without giving to the government as well.  Now I do understand that if not for this tax, people could easily take advantage of this free flow of property and money in order to avoid certain taxes, and that should be illegal.  However, if a grandfather just wants to give 10000$ to a grandchild, they should be allowed to without incurring a tax.  After all, that money got taxed when it was earned.. And it will still get taxed when it’s spent.  There is no need to tax it when it goes from family member to family member.

When looking at the estate tax, it’s even more outlandish.  At least in the scenario of the gift tax, the donor has the option to hold onto the money… aka, not give it to someone.  But in the scenario of the estate tax…. The person dies!!  They have to do something with the property that they once owned.  Taxing a deceased person passing on his legacy seems about as nuts as taxing a person on buying food.  At this point, it is taxation on a necessity.

A common argument used against the estate tax is that it is a form of double taxation on the same property.  It is taxing property that has been earned or purchased with taxes already having been paid on them.  By taxing them again, it’s like claiming that the inheritor is purchasing these items from the deceased for free..  Which again, I fine to be silly.  It should be well within our rights to pass on our legacy free of charge.

Again, there is always a way to take advantage of any rule, especially in taxation, but these are the things to look out for.  Don’t just have all out silly taxes because a small portion of the population was trying to beat the system.

Much love

-Steffan

Medicare and its Future

I recently read an article and watched a video about Medicare, in specific giving to the wealthy,(the links for the video and article are included at the bottom of this blog). To sum it up in short, what the article was saying is that Medicare is helping senior citizens who are living in resorts with entry values of $350,000 and greater, covering much of their costs. It also goes on to talk about how Medicare seems to be a failing ponzee scheme that is getting worse as time goes on, as the population is supposed to cover grows in number.
I will tell you this article peaked my interest, and perturbed me a little bit. I honestly feel that every person in this country should be guaranteed certain rights from birth including; basic food, basic shelter, and basic medical care. In this aspect, I think programs like food stamps and Medicare are wonderful in idea, but should cover everybody. In addition to this, they should only cover the basics. This still grants plenty of diversity in what people could do as private practices and bigger houses could still exist. Of course preventing the “public” granted items from turning into slums would take a great deal of effort and care in and of itself.
To being this back to point, I feel Medicare is a great thing. However, just as I said with the rights above, it should only cover the basics, guaranteeing senior citizens at least (if not everybody), the right to proper medical care, and yes, assistance when it is needed.
The problem here then occurs with the idea of, “What is basic?” Many people live many different lifestyles varying significantly in range of cost. To someone in the upper fringe of society, they may consider there nightly appetizer of king shrimp and caviar basic. They may consider that 1 million dollar a year resort, basic.
Well I propose a very simple definition of basic. Basic equals what the average American is getting. What is actually NEEDED to survive, of course taking into account ethical issues, (A vegetarian shouldn’t be forced to eat meat). However, inability to do something, eat something, or live somewhere just because it doesn’t meet your “standard” is not ethical, and is beyond basic.
In the video, many seniors suggest it is our healthcare system that needs reformed, and not Medicare. The truth of the matter is it is probably a good mix of both. I am sure there is also a good deal of corruption involved considering the amount of lobbying that is done on behalf of much of the elderly, but this is an issue with lobbying and not with Medicare.
Do I think Medicare is a good idea? I most certainly do! Do I think people are taking advantage of it? Yes I do. Do I think our healthcare needs reform? Again, a big yes! But to change things in government, first we need to want that change, not just the people getting taken advantage of, but those taking advantage. Let’s all help each other, and come up with the best possible solution, medical and all, for each of us, at all ages. We need to work to make our country the best it can be for everyone, of all ages, now, and to come.

http://abcnews.go.com/video/playerIndex?id=7541159

http://abcnews.go.com/2020/Stossel/story?id=7522306&page=1