Organization: Penn State University
Date: Tue, 17 Nov 1992 20:36:40 EST
From: <DGS4@psuvm.psu.edu>
Newsgroups: alt.politics.clinton
Subject: Re; Inheritance taxes


> I wrote
> From the Survey of Income and Program Participation:
>
> Percent of Households with householder age 65 and older who have
> total net worth in the following categories:
>                     65+        75+
> Zero or negative   5.24%      6.03%
> 1-4,999            8.93%      10.61%
> 5-9,999            3.05%      3.60%
> 10-24,999          8.09%      9.04%
> 25-49,999          13.19%     14.60%
> 50-99,999          20.92%     20.83%
> 100-249,999        26.13%     24.17%
> 250-499,999        10.04%     7.99%
> 500,000+           4.37%      3.10%
>
> Those with an estate valued at 1 million dollars are not middle class.
>
> Even those with an estate valued at 250,000 or more are in the top
> 15% of the wealth distribution.


And Paul wrote:
I will have to dig out my Statistical Abstract of the US, because your numbers
are misleading; you are excluding everybody under 65.  (Unless you are willing
to demonstrate that estate taxes only hit those 65 or older.)  And a lot of
people *under* 65 die, every day, most of them without wills.  Even
anecdotally, you can make a solid case for a "middle-class," $600K estate: take
a modest home (which, in many high-cost areas, is about $150K), add $100K-$250K
of life insurance, plus personal property and life savings, plus a pension/IRA,
and you can exceed $600K without too much trouble.

>1. I chose the 65+ because they are most likely to die and they have
>higher wealth than any age group except the 55-64 age group. Even
>if you include that age group you don't get middle class millionaires.

>2. I think the numbers from SIPP are that less than 10% of the
>population over age 65 has life insurance.  SIPP assets including all
>major personal property, including home and vehicles.
>Pensions are not a bequeathable asset, so
>should not be included in accounts of taxes after death.


> Given the length of life these days and the significant out-of-pocket
> costs of health care, it's absurd to suppose that middle class Americans
> would be hit by an inheritance tax that went down to $200,000.  The numbers
> clearly show that few people are at that level at the time they die.

This statement helps to reveal a flaw in your choice of statistics:  the high
cost of health care -- and Medicare requirements -- are probably the leading
reasons why most 65+ers don't have any appreciable assets left.  You bankrupt
yourself trying to afford it, and only when you're bankrupt can you get
Medicare -- THAT is disturbing, absent any viable, affordable alternative.

>You mean Medicaid.  By the way do you know that in some states you can
>leave your spouse with a home and up to $60,000 in assets and still get
>Medicaid

However, absent those reasons, why not dig out your almanac of choice and post
the appropriate tables for ALL adult age groups by net worth?  I think you'll
be convinced that a $200K bite will hit MOST of them.

>Fine I'll do it tomorrow.  You're wrong, wrong, wrong.  Maybe if you and
>your friends had any idea about the relaity of wealth in America, you would
>stop posting such nonsense.

Dennis G. Shea, Penn State
<<DISCLAIMER>>
Ain't nobody's bizness but my own. I'll be happy to accept all
the credit for anything I've written.  It's funny, however, how
employers only acknowledge the profitable ideas.
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