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The upper middle class got totally suckered by the Republican Party

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"Republicans are planning a tax "reform," and as usual this is code for a gigantic handout to the rich, in the form of a huge corporate tax cut and elimination of the inheritance tax. Somewhat unusually, they are at the moment attempting to partially pay for it by soaking the upper-middle class — limiting some tax benefits which the upper-middle class relies on, including the mortgage interest deduction and the deduction for state and local taxes.

It's just one more example of how the upper middle class is being played for fools by Republicans — and by the entire idea of tax subsidies. If they had any sense, they'd sign up with Bernie Sanders-style universal programs and get back at their real enemy: the top 1 percent..."

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More class war... because that works out sooo well for everybody. Rolling Eyes

NEWS FLASH: Tax cuts go to those that pay taxes.

I hope that didn't damage your delicate sensibilities.

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When they put in the estate tax reductions combined with the elimination of the alternative minimum tax, it was not the middle class who was going to be able to transfer six million dollars to their children, or are able to expense or depreciate away all tax liability for a particular year. No this tax plan is simply tax cuts for the wealthy. Period.

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Those monies have been taxed. Just because we all die doesn't mean the govt gets another windfall.

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Those monies have been taxed. Just because we all die doesn't mean the govt gets another windfall.

Nonsense. A corporation is taxed before dividends are issued, and I have to pay tax on those dividends. A progressive fair tax rate is the right way for government to get the needed revenue to run government. These are not the Saudi Royal family where because of wealth and birth right an oligarchy rules a nation. No a vibrant Republic like America has done a wonderful job of creating a level playing field for every citizen to earn what ever their talents can bring them, but property rights by birth and privilege destroy democracy. The Estate Tax is a pressure relief which does not allow a democracy to be blown apart by birth priviledge, but takes forty percent of an estate and runs government and keeps democratic institutions governing, rather than a princes and kings with inherited wealth. I look at it like a golf handicap. If all golfers who were the best golfer simply shot their average they would take ALL the money, but with a handicap system there is competition and fun, where when one places the bet the player who is scratch must give strokes. I always laugh at people who want to eliminate the estate tax because it is unfair........the exclusion was only 125k before Reagan, but today it is six million dollars under the Republican should be 2 million and pegged to the consumer price index for the exclusion. The bill is only for rich people. It hurts our nation, and it hurts people.

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Generation-skipping trusts have been used for at least a century to avoid estate tax and still leave control of the wealth transferred in the hands of the skipped generation.

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Kansas decided to ignore the many examples of what Republican policies'll get ya provided by the South, and experimented with conservative politics.

Here's what happened.

By now, the whole country knows what a godawful mess Governor Sam Brownback has made out of the state of Kansas in his doomed experiment to prove that modern conservative economics make sense. (Pro tip: They don’t.) Brownback, of course, would rather that not have gotten out to the world at large, and he and his government have done their level best to make sure it didn’t, as The Kansas City Star tells us.

The series in the Star is worth reading in full, because what happened in Kansas is precisely what the Republican Party has in mind for the country. This will necessarily including burying the evidence the way Brownback and his government have in Kansas. What happened there was a pure experiment in the supply-side, laissez-faire economics that are the primary foundation of respectable conservative crazy. They don’t work. They never will work. Their impact on the lives of ordinary people is inevitably and profoundly destructive.

Sam Brownback is a devout Catholic, you know. The president has nominated him to be some sort of half-assed ambassador for religious liberty. The Democrats in the Congress have slow-walked this nomination, and various wingnut word mills are getting antsy about it.

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Here's another thing the tax plan destroys: public education.

The Republicans have long hated public education because it's secular. The evangelicals have become the life-support system for a party that has become, for all intents and purposes, theocratic, so they're trying to kill off public school and send kids to private school, where religion can be crammed down their throats. I went to one of those schools, and it was little more than a Christian version of a madrassa. And they're far worse now.

At its heart, this tax plan is a giant giveaway to the super wealthy coupled with a cut in support for public schools and other services on which middle class and low-income families rely. Because a deficit blowing $1.5 trillion tax cut for corporations and billionaires like Betsy DeVos isn’t enough for Congressional Republicans, they’ve got to come up with additional offsets. One of the biggest on their list is ending the ability of middle class families to deduct state and local income and sales taxes that fund public schools.

According to the Department of Treasury, the state and local tax deduction is worth approximately $1.3 trillion over a ten-year period. An estimated $783 billion stems from state income and state sales tax deductions. Some $486 billion stems from property tax deductions. Undoubtedly part of the reason the state and local tax deduction is in the crosshairs of Republican tax cutters is because it’s large and benefits ‘blue’ states more than ‘red.’

Think about someone in the 28 percent tax bracket that pays $20,000 in state income and local property taxes each year. About half of that money goes to public schools either as a percentage of subsequent state budget outlays or passed through directly to schools from local governments and local school tax authorities. Ok. Consider the portion for public education, the $10,000 half.

When an individual in the 28 percent marginal tax bracket itemizes and deducts $10,000 worth of state income and local property taxes for schools, he or she reduces his or her federal tax bill by $2,800 ($10,000 * .28 = $2,800). Thus of the $10,000 that goes to pay for public education, the individual pays $7,200 and the federal government pays $2,800. In other words, the federal deduction makes using state and local taxes to fund education and other public goods or services more attractive, because it makes state and local taxes a cheaper source of revenue for regular people than they otherwise would be.

Eliminating the state and local tax deduction (SALT) would devastate the ability of state and local governments to raise funds for local schools. It would make current state and local taxes more expensive for regular taxpayers inevitably leading the conservative American Legislative Exchange Council (ALEC) and others later to call for reductions in state taxes to make up for the federal ‘tax increase’ — thus further starving public education. In other words, eliminating or significantly curbing SALT is the beginning of a cycle of disinvestment from public education.

Now Congressional Republicans want to call their SALT changes a compromise because they would retain a federal deduction for property taxes, but about 2/3rds of the current SALT deduction is for state income and state sales taxes (p 33). A little over one-third of state budgets go to fund public education. Elimination of the state and local income and sales tax deduction, the so-called House Republican compromise, would whack about $250-$300 billion in support for public education over the next ten years. That’s like eliminating the Title I program and IDEA special education program overnight.

So, wreck health care and education for the poorer people, so Ivanka can have twenty times as much money as she can ever spend, instead of just 15 times. Great.

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Deus X wrote:Generation-skipping trusts have been used for at least a century to avoid estate tax and still leave control of the wealth transferred in the hands of the skipped generation.

It didn't happen that way for me, when my aunt insisted that she maintain control along with the trust company...except for some money that she completely controlled, although it was also deposited with them. And her "management" ended up costing the beneficiaries around $90,000. Don't get me started.

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Floridatexan wrote:It didn't happen that way for me, when my aunt insisted that she maintain control along with the trust company...except for some money that she completely controlled, although it was also deposited with them.  And her "management" ended up costing the beneficiaries around $90,000.  Don't get me started.

In "generation-skipping" trusts, the Trustor or Grantor, in this case your aunt, usually grants the assets or property to the grandchildren, the Trustees, with the children appointed to act a Executors of the trust.  

As such, the Executors control how the assets are invested and are entitled to income from the profits of the investments. This tax-avoidance strategy is generally used for REALLY big estates in the tens or hundreds of millions of dollars--estates where the income alone is in the millions. You can leave your grandchildren a bundle but still provide a tidy income for your children.

Generation-skipping trusts can still be used to provide some financial benefits to a grantor's children because any income generated by the trust's assets can be made accessible to the grantor's children while still leaving the assets in trust for his grandchildren.

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generation skipping trusts still are bound by the gift and estate tax thresholds. if they were effective for moderate to large estates, there would be no need to eliminate the estate tax, or increase the exemption. They just distribute assets to many without meeting the threshold.

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