[Blikkentrekker]

I don't know about other countries, but this country is absolutely full of such loopholes and my parent is a master at exploiting them.

My entire family s moving assets around in creative ways as to save money. In anticipation of my the death of my grandparent, he is now loaning money to his children in the legal sense to avoid inheritance tax so that when he dies they don't have to pay it. — All of this is legal, and it is silly.

[throwaway2037]

My father always said that taxes are a problem of the rich. Middle class and below rarely complain about them. If your family is moving around money like that to avoid taxes, then you are a lucky and/or wealthy person!

Silly? Yes, I agree. I favour about 50% inheritance tax with almost zero minimum. Inheritance is fuel for the fire of income inequality. Families create dynasties by avoiding inheritance tax. Most highly industrialised, wealthy countries would have much less income inequality with vastly higher inheritance taxes.

[Blikkentrekker]

> My father always said that taxes are a problem of the rich. Middle class and below rarely complain about them. If your family is moving around money like that to avoid taxes, then you are a lucky and/or wealthy person!

Your father is simply wrong. It can, and is done in my family to avoid losing out on university, rent, and health insurance subsidies that only apply to the poorest segment of society.

By moving our assets around, the poorest members of the family can continue to receive them all the while effectively being slightly over this treshold.

There is much to gain from creative accounting for the poor in countries that provide assistance to the poor by making one appear poorer than one is.

> Silly? Yes, I agree. I favour about 50% inheritance tax with almost zero minimum. Inheritance is fuel for the fire of income inequality. Families create dynasties by avoiding inheritance tax. Most highly industrialised, wealthy countries would have much less income inequality with vastly higher inheritance taxes.

The problem is that it is very easy to avoid it in a number of ways such as simply creating a shell company jointly with one's heirs and then donating the assets to the company; the heir then becomes the sole owner of the company after death, as if such taxes were to apply to stakes in a company, then companies would go defunct upon the deaths of some of their owners.

Tax laws in many ways rely on citizens not being clever enough to exploit the numerous loopholes, — but then again “idiot tax” is not something I'm entirely opposed to.

[dnautics]

I think "taxes are a problem of the rich" is a thing that rich people say. I've been poor, and taxes really fucking suck when you're poor. It's even worse when you're poor and in a service industry where taxes are really stacked against you (taxes on tips). Finally, since this is, after all a thread about inflation: Bracket creep is a thing.

[vineyardmike]

> Most highly industrialised, wealthy countries would have much less income inequality with vastly higher inheritance taxes.

Its trivial for someone with lots of money to find ways to avoid dying with money but still ensure the next generation has a good life. As grandparent comment suggests. I don't think any tax or any plan that is not destructively over-burdensome can avoid people ensuring their next of kin have a good life.

[throwaway2037]

You wrote: "destructively over-burdensome"

How do you feel about my suggestion of 50% inheritance tax without loop holes and minimums? It should decrease inherited wealth by greater than a geometric rate.

If any Germans / Austrians / Taiwanese / Koreans / Japanese are reading this thread: Can you comment about how to handle inheriting a family business than is worth more than 1M EUR? (They are all famous for "Der Mittelstand"[1].) My point: When you begin to add exceptions, 1M EUR quickly becomes 10M EUR and 100M EUR! Idea: You "pay" the tax on a family business inheritance buy guaranteeing payments to national tax authority / treasury as long as the business is open. (Assume business does not go bankrupt!) You can discount the future cashflows and get a present value that appears as a debt on the company balance sheet.

[1] https://en.wikipedia.org/wiki/Mittelstand

[vineyardmike]

> without loop holes and minimums

How does this work? There are always loopholes. I don't think it could exist, nor will exist with the incentives of politicians, frankly. It would be nice though.

> How do you feel about my suggestion of 50% inheritance tax without loop holes and minimums? It should decrease inherited wealth by greater than a geometric rate.

I have no issue, in theory with aggressive taxes. I of course don't want to lose my income if the taxes don't help society, but i have no issue with useful tax. As a not-billionaire without inter-generational wealth protect, i see inheritance taxes value. I think, realistically, that people will always prefer to protect/provide to kin, at expense of society, and we have to work around that.

Can i create a holding company, co-owned between me and next-of-kin and "invest" my money in it then let them liquidate?

Can i loan them the money? Can i gift them money? Can i store in trust? Do other nations have successful ways to do this?

> Idea: You "pay" the tax on a family business inheritance buy guaranteeing payments to national tax authority / treasury as long as the business is open.

This seems like its burdensome to the business, in a way that could be destructive to it. If you suspend payment when its not profitable, then you can act like amazon and many other corps and eternally run a deficit to avoid tax. If you don't allow that, then you're draining the cashflow of a valid business which may kill it.

Frankly, i think its backwards too. Giving cash or liquid assets to your kids? Tax the S*T out of it. Giving a successful business that employees lots of people in your local town? Don't ruin the business trying to tax an old (wo)man giving it to their kids - that's destructive. Tax the kids when they cash-out from the business (sell biz, receive income, etc). I'm not particularly biz friendly, but they have real value to people outside of the family and produce something for society.

I also don't think its unreasonable to not tax real estate transfers, especially if its a primary residence. Maybe estate that actually stays in the family multiple generations doesnt get taxed, idk. Lots of people have strong multi-generational attachment to physical places. That's what really makes this hard.

[MinorTom]

Note: I'm not the person to vote for more taxes, and I agree with you in principle. It's just that your arguments aren't ones.

> Can i create a holding company, co-owned between me and next-of-kin and "invest" my money in it then let them liquidate?

You'll always have to transfer the stock to your next-of-kin somehow. This is where a tax would apply.

> Can i loan them the money?

Yes, but they'll need to pay it back someday. That makes the debt a taxable asset. (i.e. when you inherit you inherit the "asset" = the obligation, which is taxed with 50%)

> Can i gift them money?

In Germany the gift tax is the same as the inheritance tax.

> Can i store in trust?

Yes, and that's why I agree with you. It's just not as simple to avoid inheritance tax as you make it out to be.

[vineyardmike]

> It's just not as simple to avoid inheritance tax as you make it out to be.

I'm not claiming that all those are successful ways to do it. But rich people seem to find a way to do it, probably using a combination of the above and other tricks i don't know.

Lots of ideas... no idea what works well. It's a hard issue to avoid and a harder issue to catch those avoiding.

[sombremesa]

> Most highly industrialised, wealthy countries would have much less income inequality with vastly higher inheritance taxes.

It's true that extremely tax-heavy countries generally have poorer populations with a more even wealth distribution, but that's more or less the result of "nobody will get rich if you take everyone's money".

The vast majority of millionaires in the US are self made, so inheritance taxes couldn't possibly change that?

[imtringued]

Ever wondered why government debts are a problem to begin with? Lots of people with money aren't paying taxes. There is always enough money in an economy to repay all debts, the problem is getting that money to move back to the government. If interest is positive it must loop around multiple times.

[jdsully]

I'm surprised that forgiven debt isn't considered income. It would be in the US, but then in the US the debt would still be owned by the estate and is still collectable.