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|Subject: Re: Estate / death taxes: was my grandfather foo||Date: 4/14/2008 1:34 PM|
|Author: ziggy29||Number: 62259 of 76418|
>> While I respect Phil's opinion I don't agree with doing away with estate taxes.
I do agree with the current levels and believe they should be indexed for inflation. <<
I think an exemption of $3-5 million, adjusted for inflation, is reasonable.
As far as a "death tax" that really hits people of all classes, how about this?
My dad passed away in 2005. From 2005 to 2006, my mom's household income dropped by about $8000. This was because she inherited my dad's Social Security benefit which was higher than her own, but she lost hers in the process. She was getting nearly $700 a month on her own which she lost when she became widowed.
In 2006 she had to change filing status from MFJ to single. In so doing, her tax bracket jumped from 15% to 25% despite losing that income from the second SS check. And to add insult to injury, it meant that 85% of her smaller SS benefit was taxable instead of 50% of a larger combined benefit when filing MFJ. And she lost a personal exemption and half the standard deeduction.
So despite seeing income drop from about $56K to $48K from 2005 to 2006, her taxes rose from about $3,500 to about $7,500 in one year...all because she lost her husband of more than 49 years.
That's a "death tax" that really hits the middle class and below.
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