Comments (18)

• quasibill

  Okay, someone's going to need to help me with this one - my understanding is that the estate tax hits you even if have inheritance rights. I guess the argument is that the spousal share is immune from the estate tax? Can someone familiar with the law confirm whether this is true? Otherwise, the argument is nonsensical.

  Published: June 8, 2006 7:17 AM

• Vince Daliessio

  Generally speaking, yes - the spousal share is largely immune, in most states. I don't have any more technical information than that. But the larger point is that it shouldn't matter who you give your property to at your death, it shouldn't be a taxable event. Very wealthy people and corporations avoid this tax by legal chicanery, thus there is a moral imperative to eliminate it, gay marriage or no.

  Published: June 8, 2006 9:03 AM

• quasibill

  Vince, I agree that the tax should be repealed, I'm just wondering why gays should care about it anymore than anyone else. It seems like he was trying too hard to make his point.

  My understanding is that the article was talking about the federal estate tax, which should be uniform across the states, so I'm still not too satisfied with your answer, as you qualify it "in most states" (not criticizing you, just trying to nail down an answer). Does the federal estate tax exempt spousal shares?

  Published: June 8, 2006 9:15 AM

• Vince Daliessio

  As best I can tell, spouses ARE exempt, see this article;

  http://www.grandtimes.com/etax.html

  The reason I brought up state estate taxes is that state laws set just who has survivorship rights over joint or marital assets. Just because you are exempt as a spouse from the federal death tax does not mean you are exempt from the state estate tax. Add mandatory probate costs in some states and you could be looking at either a huge tax or a huge savings.

  Published: June 8, 2006 11:55 AM

• James W. Fogal, CFP, ChFC

  Within a legal marriage, spouses can directly transfer unlimited amount of assets to a U.S. Citizen spouse without any gift or estate tax consequences -- it is referred to as the unlimited marital deduction. Homosexuals do not have the same ability without legal marriages. They are limited to exhausting the applicable credit amount (which in 2006 is $2 Million per person) with no transfer taxes. After that is transferred to a non-spouse, gift or estate taxes kick in.
  The author is referring to this fact.

  Published: June 8, 2006 1:37 PM

• M E Hoffer

  Mr. Fogal,

  Would you do us the additional favor explaining, in full, the idea of "U.S. Citizenship"?

  Published: June 8, 2006 1:52 PM

• M E Hoffer

  P.S. Could you also explain why a "marriage license" is a three-party contract?

  Thank you very much, in advance.

  Published: June 8, 2006 2:07 PM

• James W. Fogal, CFP, ChFC

  Mr. Hoffer:
  I don't think I will be able to give an adequate answer to the two questions you posed. Maybe someone else on the list will be able to provide the answers you posed.

  Published: June 8, 2006 3:45 PM

• N. Joseph Potts

  M. E. (Hoffer): the marriage contract is a three-party contract for the same reason that your earning income obligates you to pay money over to a party (the government) previously uninvolved in your income-earning transactions: people who lived before us arranged for this power to reside in the sole monopolist on the legal use of force (the government). The answer to your question, which I take to be ironic, lies deep in the mists of history, sociology, and perhaps anthropology.

  This same government defines what US citizenship is for its own purposes, partly for the use of this same government's tax-collecting arm (the IRS) in assessing exemption from its Estate Taxes.

  But you already knew these things, didn't you? Or maybe you really do live in some wonderful place where these matters would really be questions to informed members of society.

  Published: June 8, 2006 4:32 PM

• M E Hoffer

  Dear Mr. Potts,

  this part: "Or maybe you really do live in some wonderful place where these matters would really be questions to informed members of society."

  I'm really not sure if I understand your drift...

  And, with this: "people who lived before us arranged for this power to reside in the sole monopolist on the legal use of force (the government). The answer to your question, which I take to be ironic, lies deep in the mists of history, sociology, and perhaps anthropology."

  Could you possibly rephrase? I am somewhat baffled by it.

  Thank you very much for enjoining my 2 Q's

  
  

  Published: June 8, 2006 4:42 PM

• Mark Fulwiler

  Bill Gates' wife basically can inherit his entire estate without paying tax on it, but if Mr. Gates had a friend he wanted to leave his money to, the friend would get stuck with a pretty serious tax bill.

  However, as a practical matter most people don't have estates big enough for the estate tax to kick in, so it's hard to get much political mileage out of it.

  Published: June 8, 2006 5:15 PM

• Lisa Casanova

  I didn't know the thing about spousal inheritance. I guess people don't really care about that- the thing that gets them really worked up is people leaving money to their kids. This starts people crying a big river about the evils of creating "hereditary elites" and "aristocracy" and people getting money they don't deserve, as though the money you get because your parents DIE is some sort of wonderful windfall we all can't wait to get our hands on.

  Published: June 8, 2006 5:27 PM

• gbridgman

  There's no Federal estate tax passing from husband to wife, but there is no such 'marital deduction' for assets passing to someone other than spouse. That's clear.

  However, how about a gay spouse (married in Mass) leaving money to spouse?

  From Federal perspective, it's easy: no marital deduction.

  From State perspective it seems more complicated because the Mass Estate tax (up to 16%) kicks in at $1,000,000 and higher, and (in a complicated sort of way) mirrors the Federal.

  Time for some research.

  Published: July 6, 2006 11:04 AM

• GMH

  I think the best thing for gay people to do is to refuse to pay any federal taxes and any taxes to states which do not grant civil unions or marriages. They should pay for what they get, unequal protection. As far as the estate tax goes, imagine Paris Hilton earning a living... Other than mock those whose jobs she is unqualified to do, does she have any skills? Oh yeah. Who wants to see that?

  Published: July 6, 2006 3:53 PM

• orange county home inspectors

  Everyone should pay equal taxes, period.

  Published: July 10, 2006 12:11 AM

• orange county home inspectors

  Everyone should pay equal taxes, period.

  Published: July 10, 2006 12:11 AM

• ron

  I agree with GMH. I have long since suggested that the best way to be heard would be refusing to pay income taxes. Why should I or any other gay persons be forced to pay taxes when we are denied the simplest rights garaunteed by our constitution? I don't think that my tax dollars should be used to create legislation that denies me rights or openly discriminates against me. Unfortunately, trying to organize such a protest would be difficult as we are conditioned to be very afraid of the IRS and its counterparts.

  Published: March 4, 2007 6:50 PM

• averros

  Everyone should pay equal taxes, period.
  
  
  ...namely, $0/yr.

  Published: March 4, 2007 8:14 PM