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HomicidalHushPuppy t1_jbgpk03 wrote

They forgot to include our ridiculous death taxes

Edit: the state taxes your wealth when you earn it and your stuff as you buy it, they have no right to just take all your shit when you die

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hippata2023 t1_jbhjj35 wrote

PA's death tax is insane. The lowest rate is 4.5% between direct descendants/lineal heirs (e.g. parents to kids) and there is no floor. If your parent's estate is greater than 0, you're going to owe 4.5% of whatever's there.

For context, the Fed's do it right: in order to be subject to it, the estate has to have be in excess of $12 million.

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mrboozer t1_jbi21vn wrote

There is a lot of room in the middle there.

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Super_C_Complex t1_jbi97up wrote

Lowest is 0 actually.

Certain farmland is exempt, children under 21 don't qualify, and property owned by spouses

But also, this is money owed on transfer and as much as the tax is the alternative is that it's taxed like income by the recipient.

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RedditMemesSuck t1_jbgyea0 wrote

Looks like I’ll be dying in West Virginia

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HomicidalHushPuppy t1_jbk72u5 wrote

My family has been in PA for over 200 years, but my brother has left the state, I'm looking to follow within the next 5 years, and we're hoping to move our parents (or at least the one who is still currently single, they divorced years ago) out at some point in their lifetime.

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RedditMemesSuck t1_jbk80nb wrote

I don’t think any of my family has any plans of leaving soon, we’ve been here since the late 1600’s/Early 1700’s

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69FunnyNumberGuy420 t1_jbkdzvi wrote

PA's estate tax ain't gonna affect the $1800 and a rusty Camry you'll be passing on to your heirs

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RedditMemesSuck t1_jbkephr wrote

What’s your problem?

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69FunnyNumberGuy420 t1_jbkewk0 wrote

People bitching and moaning about taxes that don't affect them because their betters have been pushing propaganda out about it for decades.
 
This sub is like Facebook Grandpa's feed with that shit.

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RedditMemesSuck t1_jbkf7gy wrote

Can this sub not take a joke at all? Like you’re the second person to get butthurt over this

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69FunnyNumberGuy420 t1_jbkfcnx wrote

Every other thread is somebody bitching about taxes. There's a senior center five blocks from me if I wanted to experience that constantly.

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RedditMemesSuck t1_jbkfu7g wrote

You’re the one… who… read the comments and… decided to comment yourself? You initiated this, if my comment upset you why not just block me and move on instead of insulting me?

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psychcaptain t1_jbh8c3f wrote

Well, it would mean one less person to deal with, so I support you! Can I help you pack?

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Aisling207 t1_jbgt2cr wrote

I don’t know why the PA death tax doesn’t get more attention!

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start260 t1_jbh10q6 wrote

It brings in about a billion a year. And the income tax on fees paid to estate planning lawyers for those trying to avoid the tax, probably brings in more than that.

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Aisling207 t1_jbh3ly2 wrote

I’d love to see a source on that estimate. As for lawyers’ fees, that’s bs; you can’t avoid it. And there’s no amount exempt; you pay it if your estate is $10 or $10 million.

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Creative_Camel t1_jbh437v wrote

If you place assets in a trust you can avoid probate taxes. I’m not a lawyer but those who do these things say that’s what you can do

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Aisling207 t1_jbh4zor wrote

Not true. A living trust avoids probate, but does not shield assets from inheritance tax.

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Creative_Camel t1_jbh5kbu wrote

Irrevocable trusts avoid these:

https://bononiandbononi.com/blog/2022/02/how-to-avoid-pennsylvania-inheritance-tax/

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hippata2023 t1_jbhl03i wrote

That's bad information, which is surprising come from a law firm.

While joint assets will avoid probate, they're still subject to PA inheritance tax. My grandmother got nailed with this because she comingled (joint bank account) her monies with my aunt (my aunt had a long, hard road to death through severe dementia and multiple strokes). She did it because she found it easier to manage my aunt's estate while she was alive. When my aunt died, my grandmother was on the hook on paying tax on the half the balance of this account -- even though, by this time, most of the funds in the account were my grandmothers, not my aunt's. Yes, she was taxed on her own money.

Joint assets held by spouses will avoid the inheritance tax, but that's it. Only spouses.

Regarding irrevocable trusts, I researched this awhile ago and can't quite get back to it. While most states do observe irrevocable trusts as a way to avoid probate, PA is a weird one in that in order to do so, the trust has to meet certain conditions. 2 common conditions found in irrevocable trusts: the right to income and the right to change beneficiaries, will make the irrevocable trusts subject to inheritance tax, even if it avoids probate.

TL;DR: talk to an estate lawyer

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Aisling207 t1_jbh5xjp wrote

And most people won’t do those because they lose control of their assets.

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Creative_Camel t1_jbh6v1z wrote

Understood and some will instead choose a life insurance policy to pay the taxes or move to Florida or NH

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Aisling207 t1_jbh7b89 wrote

Which makes it a tax that falls disproportionately on those without the means to afford those options.

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start260 t1_jbhbfrs wrote

https://www.penncapital-star.com/blog/revenue-dept-pa-collected-3-8b-in-tax-revenue-in-december/

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Aisling207 t1_jbhc5nn wrote

So, substantially less than $1 billion.

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start260 t1_jbhg2zs wrote

That’s still a substantial amount of tax revenue. However I did not realize how much the revenue has gone down. The feds getting rid of the estate tax which effectively repealed the Pa Estate tax and legislation allowing the ability to pass down family owned businesses and farms without paying the tax has had a huge effect on revenue. So yes there are ways to avoid the tax and Estate lawyers do earn their keep.

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Aisling207 t1_jbhhibv wrote

There really are not practical ways for the vast majority of people to avoid the inheritance tax.

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psychcaptain t1_jbh4yxy wrote

Because it doesn't really matter to most people? Honestly, inheritance tax is still such a pittance, and does nothing to prevent the concentration of wealth into a new, crappy aristocracy.

The fact that people like Paris Hilton exist is a reason to support 100% I heritage tax when only adults are involved.

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Aisling207 t1_jbh5g3p wrote

It applies to everyone, not just wealthy people. And it disproportionally affects unmarried people and people without children.

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psychcaptain t1_jbh6j9s wrote

You're dead, so saying it applies to someone is a stretch.

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Aisling207 t1_jbh8f6f wrote

The person who pays the tax is the person who inherits. If one half of an unmarried couple dies, the other owes PA 15% of their partner’s share of their home and bank accounts.

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psychcaptain t1_jbh8l5t wrote

Unmarried seems like an easy problem to solve, doesn't it?

Honestly, if a couple can be bother to do the bare minimum, I am not going to bother caring.

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Aisling207 t1_jbh96za wrote

That’s a very uninformed comment. Some people would lose pension and/or social security benefits that they need to live on if they remarry. Or the ability to be buried with a military vet former spouse.

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psychcaptain t1_jbha2ev wrote

So, basically, they want to have their cake and eat it?

Yeah, I don't have much sympathy for people trying to game the system.

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Aisling207 t1_jbhbh6p wrote

So a widow trying to scrape by on a pension they’d lose if they remarry is gaming the system? I guess widows should retreat into perpetual mourning and never find another relationship to satisfy your “sympathy” requirements. Good grief. Literally.

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psychcaptain t1_jbhcdlb wrote

I don't think Pensions are written the way you think they are.

Those that are a based on the idea of 'double dipping' where the money is a last resort. If you happen to get married, than the last resort shouldn't be necessary any more.

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Aisling207 t1_jbhdhxs wrote

I’m very familiar with pensions, including civil service, military, and private company pensions, as well as social security, thanks to helping several older relatives deal with their reduced pensions and social security benefits upon the death of a spouse. I honestly have no idea what you mean by “double dipping” or “last resort.” Do you know any retirees or widows?

Perhaps you think everyone should have an IRA or 401(k)? Well, many current retirees spent their main working years before those were the main way to save for retirement. And many people spent years out of the workforce caring for children or elderly relatives (for no pay).

It’s easy to be unsympathetic to hypothetical situations. When you actually see people struggling, it gets real.

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psychcaptain t1_jbhflr7 wrote

I am unsympathetic to Babies Boomers who voted GOP for decades, and now getting hurt by their own rules.

I do now a bit about Social Security Benefits though. As a widow, you get up to 75% of your spouses PIA as long as it doesn't exceed your benefits. Homemakers are screwed by this, but so is everyone without an income, whether you are married or not. God, if you have been disabled for a while, that's a lot of potential income you have lost for Social Security Benefits. You do get COLA.

But, I digress. As widow (er), you can get up to 75% of your spouses PIA, as long as it doesn't exceed your own Payments. Depending on the situation, that should be more than half the income people usually get, which makes some sense, because it's supporting half the people.

Here's the thing, if you remarry before 60, you might lose it (unless you divorce again), but if you remarry after 60 you don't.

If you remarry before 60, hopefully you are working and making your way in the world, and of reliant on your dead husbands pension.

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Aisling207 t1_jbhh4cp wrote

Oh, cool, I see we’ve moved into the ASSumption phase here. News flash: not all Silent Generation and Baby Boomers voted GOP. Not all of them lived in PA for their entire voting/working lives.

Social security is one thing. Pensions are absolutely lost upon remarriage. And the thing is, half of one’s expenses don’t disappear when one spouse dies. Some expenses decrease, but not all, and often not by half. And some widowed spouses are caring for minor children.

But, whatever. The fact is that one half of an unmarried couple, whether it is a romantic couple, relatives or roommates should not have to lose their home to pay the state when someone dies.

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69FunnyNumberGuy420 t1_jbk5xnd wrote

The "death taxes" should be 100%, no one should get to be rich because their grandpa was. Fuck 'em.

 
Cross-generational wealth is poisonous to democracy.

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psychcaptain t1_jbh4him wrote

Dead is dead, can't take it with you and passing on wealth only creates lazy ingrates, like Paris Hilton.

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Aisling207 t1_jbh54qi wrote

Except it applies to everyone, even if the estate is $1.

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psychcaptain t1_jbh6mkj wrote

Except, whomever it applies to is dead. So, it doesn't matter.

Anyone else can just get a job, instead of expecting handouts from dead people. https://www.revenue.pa.gov/TaxTypes/InheritanceTax/Pages/default.aspx

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69FunnyNumberGuy420 t1_jbk7kn8 wrote

A lot of poor people in this thread are carrying water for insanely rich people who use their cross-generational wealth to create a de facto class of nobility. Very cool.

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psychcaptain t1_jbh6x2r wrote

If you are under 21, you don't pay a dime, so I am not seeing a problem. And if you are over 21, you should have a job, instead of expecting handouts from dead relatives.

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Aisling207 t1_jbh8vjq wrote

The money has already been taxed. If the Feds don’t tax it, why should PA? Plus it unfairly punishes unmarried couples and found family.

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psychcaptain t1_jbh9mhe wrote

Unmarried couples is a pretty easy problem to solve.

If they are unmarried for tax reasons than this is the risk they take.

As for the Fed, there is a lot they don't tax and a lot they do tax that is different from the state.

The Fed doesn't tax 401(k), but the State does. The State doesn't taxes 529, but the Fed does. It's not a serious argument.

Found families aren't taxed any different from regular families with kids over 21 so I don't think that works either.

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Aisling207 t1_jbhatl3 wrote

Oh, boy.

I never said “unmarried for tax reasons,” I pointed out that many widows/widowers will lose all of their pension and social security benefits if they remarry. That’s not about taxes, it’s about survival.

The Fed absolutely does tax 401(k) benefits.

Found families are taxed at 15% by PA. Lineal descendants are taxed at 4.5%, siblings at 12%. So yes, they are absolutely treated differently.

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psychcaptain t1_jbhb2ac wrote

401(k) are exempt from Income Taxes.

Roth is not.

And if a person benefits financial from not being married, I don't see why it should be up to us to give them more.

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Aisling207 t1_jbhbuzn wrote

You have that completely backwards. A Roth IRA has already had federal taxes withheld and withdrawals are not taxed. 401(k)s contributions and gains are not taxed by the Feds until withdrawal.

And no one is “giving” anyone “more” by abolishing inheritance tax.

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psychcaptain t1_jbhdj0l wrote

Ironically, I've worked in the retirement industry for over half a decade, and I do know the rules for 401(k) and Roth pretty well. I was talking about taxes per payroll.

Since we are talking about being dead, you aren't actually taxes on your 401(k). It can be passed on to your children and or spouse.

As for inheritance Taxes, I love it. It solves 3 distinct problems and no one suffers.

1). In a capitalist system, money should be earned. People should work for it. Competition should bring out the best. Generational Wealth distorts the system. It creates dynasties of people earning wealth on their wealth based on little or no input of the one holding it. It creates lazy lay abouts landless aristocracies and new version of feudalism. It breaks the system down.

2). The funding can be used for things that people care about, rather than statues, university wings of colleges you family will never attend, KKK groups or Libraries.

3). It helps people realize that they should spend their hard earned money and enjoy life. Accumulating wealth should not be something people do as an end goal Eye of a needle vs camels.

Now, I am happy to make exceptions for spouses and minor children, but outside of that, well, I hate the idea of creating more loop holes where none are necessary.

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Aisling207 t1_jbhft7l wrote

My point was that even the Fed recognizes that taxing all estates/inheritances regardless of size is unfair. You are arguing for a regressive tax. A widow/er who would lose their income or right to be buried with a previous spouse by remarrying should not be forced to sell their house to pay the state if their partner dies. A person without children should not be penalized for wanting to provide for the time and expenses of an unrelated caregiver.

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psychcaptain t1_jbhg399 wrote

A widow only loses the benefits if they get married before age 60.

Do you know a lot of 50 year Widows living off their dead spouses Social Security Benefits?

We aren't talking about 75 year Meredith, we are talking about 50 year Sandra's, who should get a job.

And if they are disabled at 50, and getting DIB, they also keep their Spouses benefits.

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Aisling207 t1_jbhi6f2 wrote

Look, it’s really not your business to tell anyone to get a job. But realistically, yes, we ARE talking about 75 year old Meredith, who relies on a pension and cannot remarry, but who met a nice person she’d like to be with, but would lose that pension and the ability to be buried with her first spouse if she remarried. She and her partner own a house together. Or maybe she and her sister own the house. If that person dies, she owes PA a big check, which forces her to sell. Plus she has to turn over part of her bank accounts.

We really aren’t talking about Real Housewives of Altoona or Paris Hilton or whatever.

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HomicidalHushPuppy t1_jbh7jjk wrote

But think about what you could do with extra money - reinvest it, build a business, start a charity, etc. Instead it just disappears into the state's coffers. If it's ever seen again, it'll be in the form of a public service where the benefit to everyone is financially negligible.

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psychcaptain t1_jbh82j0 wrote

You mean pay for roads, police, hospitals and schools because Rich people do Fuck all with their money, except make sure their descendants stay wealthy, and give large endowments to build statues to their honor.

I have no interest in support somebody's Egyptian Pharaoh Cosplay, when the money could be better used in the Commonwealth.

If you don't like how the money is being used in the Commonwealth, do something about. Run for office and make a difference.

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HomicidalHushPuppy t1_jbh99w1 wrote

This isn't strictly about wealthy people. There are enough average people who would benefit from generational wealth than there are wealthy people who don't need it passed down.

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psychcaptain t1_jbh9yqc wrote

Sorry, as a strong believer in Capitalism, and Earned Wealth, the idea of Generational wealth is horrifying.

You earn your own money, not get it past down to you. That shit is for pansy ass white lily aristocrat wannabes. This is the United States of America. You pull yourself up by the bootstraps, you work hard, and you get things done.

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69FunnyNumberGuy420 t1_jbkel6d wrote

> Instead it just disappears into the state's coffers.
 

Ah, cool to see that you've bought into seventy years of propaganda being pushed by very rich people, your betters, who use their intergenerational wealth to help keep you in your place.

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